Now that’s a property crash

CNN has a story on house price declines being at their highest in 30 years. Turns out the headline is misleading in two ways. Firstly it proclaims house prices at a 30-year low, which is fortunately not quite the reality. However, the largest decline in 30 years is still pretty shocking. The second item is that the 12.4% decline in US house prices in 2008 is the worst since they have been systematically recorded.

Home prices fell 12.4% during 2008, the largest yearly decline since the National Association of Realtors began keeping comprehensive records in 1979.

As always, averages are a useful measure of overall market movements, but hide some truly enormous declines in individual areas:

Cape Coral-Ft. Myers, Fla., prices fell a devastating 50.8% for the year, to $110,900 from $225,300. That was the most precipitous plunge for any metro area. Saginaw, Mich., prices fell 41.4%; Riverside-San Bernardino, Calif., prices dropped 40.8%; and San Jose, Calif., prices declined 37.7%.

Those who say property prices always go up, or only ever down by a little, meet your awkward facts.

Those who say our property market has done poorly, compare against these figures and against the equity market for an equally troubling view. Our house prices will decline further but (political meltdown excepted) I’d bet serious money that we won’t see these declines in 2009 or 2010.

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