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Detroit area slides 15.1%, index says

BY GRETA GUEST • FREE PRESS BUSINESS WRITER • MARCH 26, 2008

Home prices across the country continued to decline in January, with metro Detroit registering a 15.1% drop in the past year.

The S&P/Case-Shiller Home Price Indices, released Tuesday, show that 16 of 20 metropolitan statistical areas posted record year-over-year declines, half of which were in the double digits.

Overall prices fell a record 11.4% on the 10-city composite and fell 10.7% on the 20-city composite.

“Unfortunately, it does not look like early 2008 is marking any turnaround in the housing market,” said David Blitzer, chairman of the index at Standard & Poor’s. “Home prices continue to fall, decelerate and reach record lows across the nation.”

Metro Detroit has suffered with record foreclosures, driven by job losses, the subprime mortgage fallout and resulting credit crunch. The oversupply of houses on the market has depressed prices.

Kay Booth, a real estate agent with Re/Max Partners in Royal Oak, said the 15% decline sounds about right for the area.

“I don’t think there is any community that has been spared. It’s just a matter of how much,” Booth said.

Some areas in Oakland County have been hit hard, she said, including Hazel Park, Madison Heights and Oak Park, where home prices have likely fallen more than 20% because of high numbers of foreclosures.

“Royal Oak is doing OK, but it is down at least 12%. We are driven by the foreclosure market and also that there is still so much inventory,” Booth said. “If you don’t have a cream puff, the price has to be knocked down considerably to get a buyer.”

Las Vegas and Miami had the weakest markets in January with declines of 19.3%, followed by Phoenix with an 18.2% drop in January. San Diego prices fell 16.7% and Los Angeles was down 16.5%.

All of the 20 largest metropolitan areas saw home prices fall in January compared with January 2007 except for Charlotte, N.C., where prices rose 1.8%.

Tags: home prices, real estate

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