Second Quarter Home Prices Fall, More Expected in Coming Months

Second Quarter Home prices fall record 3.2% nationally, San Diego: -7.3%

WASHINGTON (MarketWatch) -- U.S. home prices fell at a faster rate in the second quarter, down 3.2% compared with the same period in 2006, Standard & Poor's reported Tuesday.

It marked the largest year-over-year decline ever recorded in the 20-year history of the Case-Shiller home price index. A year ago, home prices were rising at a 7.5% pace nationally.

In an interview with MarketWatch, Shiller noted that the figures were for activity ending in June -- well before the more recent blowup in the mortgage markets.

"We are fast approaching the rate of price decline seen at the end of the 1990-91 recession, and the odds strongly favor blowing past this mark in coming months," wrote Joshua Shapiro, chief economist for MFR Inc. "With supply overhang growing and mortgage financing tougher to obtain, home prices are going to soften considerably further in the quarters ahead."

Cities covered by the Case-Shiller index, ranked from worst to best:
Detroit, down 11%: Tampa, Fla., down 7.7%; San Diego, down 7.3%; Washington, down 7%; Phoenix, down 6.6%; Las Vegas, down 5.1%; Miami, down 4.8%; Los Angeles, down 4.1%; San Francisco, down 4%; Minneapolis, down 3.8%; Boston, down 3.7%; Cleveland, down 3.6%; New York, down 3.4%; Denver, down 1%; Chicago, down 0.7%; Atlanta, up 1.6%; Dallas, up 1.6%; Portland, Ore., up 4.5%; Charlotte, N.C., up 6.8%; and Seattle, up 7.9%.