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US local housing prices see biggest drop since 2009 – Orange County Register

The sudden reversal in the housing market is driving down prices in the biggest way since the Great Recession.

The widely watched Case-Shiller indexes in August for Los Angeles and Orange counties and the nation recorded the largest one-month declines since 2009.

For the month, the LA-OC index fell 2.25% – the 10th biggest drop in Case-Shiller history dating back to 1987. The index fell 1.62% the previous month, the 17th drop.

The housing market has begun to slump as the Federal Reserve raises interest rates to curb the highest inflation in decades. Even with the deceleration, prices remain high in many cities compared to last year. Along with mortgage rates approaching 7%, many potential buyers have been shut out, while some sellers have retreated.

Case-Shiller indices are notorious for being slow benchmarks. These criteria reflect long-term price changes in single-family home sales for the three months ending August.

Year over year, the LA-OC index rose 12.1%, a gain well below the pandemic high of 23.4% set earlier this year. That puts the index 4.3% off the all-time high, but still 39% above February 2020, just before the coronavirus upended the economy.

While prices are still rising year over year, they are cooling at a rapid rate. The 12-month LA-OC gain was 3.6 points lower than July’s 15.7% increase – tying July for the biggest cooling in appreciation since 1987.

Nationally, a measure of prices in 20 major U.S. cities in August fell 1.3% month over month, the most since March 2009. A national measure of prices rose 13% in August over the previous year, compared to a 15.6% gain in July, the largest deceleration in the index’s history.

California Daily Newspapers

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