It looks like the real estate “double dip” has arrived – not that it was much of a surprise. According to the S&P/Case-Shiller 20-City Composite Index, home prices fell in March 2011 to lows not seen since 2003. From BusinessWeek:
Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.
The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.
Home Price Decline Now Worse Than the Great Depression
The latest numbers show that home prices have fallen an astounding 31.6% since the index peak in March 2006. That’s significantly more than the “25.9% decline in the Depression-era years between 1928 and 1933″ reported by Zillow.com a few months back.
Considering the ongoing challenges in the real estate market, the fact that prices continue to slump shouldn’t be much of a surprise. A tough economy, high unemployment, and a large backlog of foreclosures will continue to be a drag on home prices. And if mortgage rates rise over the coming months and years, that will be a drag on home prices as well. Odds are, we’ll probably see more price declines for the foreseeable future.