House Prices Dropped in 70% of U.S. States in 2008, Report Says Print
Written by By Dan Levy. Bloomberg News   

Home prices fell in 34 U.S. states in 2008 as it became harder to get a mortgage and foreclosures hammered property values, First American CoreLogicsaid.

Prices for single-family detached houses fell a record 10.6 percent nationally, the biggest annual decline in data that goes back to 1976, Santa Ana, California-based First American said today in its year-end report.

``The geographic breadth of the decline expanded in 2008,'' Mark Fleming, First American's chief economist, said in an interview. Even markets with few foreclosures ``are being drawn in by fundamental economic conditions.''

The U.S. economy is ``deteriorating rapidly'' after 2.6 million job losses in 2008, Christina Romer, President Barack Obama's pick to head the Council of Economic Advisors, said Jan. 15. First American, which sells mortgage data, reported defaults or foreclosures on 3.4 million properties in 2008, up 76 percent from 2007.

U.S. home prices have dropped 18.5 percent from their peak in July 2006 and are now at May 2004 levels, First American said.

California led last year's decline with a 27 percent drop, followed by Nevada at 23 percent, Arizona at 19 percent and Florida at 18 percent, First American said. Prices tumbled 14 percent in Rhode Island, 10 percent in Minnesota, 9 percent in Wyoming, New Hampshire and Maryland and 8 percent in New York.

West Virginia Climbs

Declines of 3 percent or more occurred in 24 states and the District of Columbia, according to First American.

``The magnitude of the declines is similar to what we experienced previously'' in regional recessions that hit Southern California and greater Boston in the early 1990s and eastern Texas and Oklahoma in the early 1980s, Fleming said.

Before last year, the only annual price drop for U.S. houses in the last three decades was 2.9 percent in 2007, according to First American's data.

Prices rose 4.2 percent last year in West Virginia and 3.6 percent in Texas and South Dakota. Montana prices rose 2.6 percent, Mississippi saw a 1.7 percent increase, Utah a 1.5 percent gain and New Mexico a rise of 1.3 percent, according to First American.