Home prices plunge in January: S&P/Case Shiller

NEW YORK (Reuters) - U.S. single-family home prices plummeted in January, showing the first year-over-year drop in home values in more than a decade, according to an index of major metropolitan areas published on Tuesday.

The composite month-over-month Standard & Poor's/Case-Shiller Home Price Index of 10 metropolitan areas declined 0.6 percent to 220.90, or a 0.7 percent year-over-year loss, S&P said on its Web site.

"The annual declines in the composites are a good indicator of the dire state of the U.S. residential real estate market," Robert J. Shiller, chief economist at MacroMarkets LLC, said in a release.

"The 10-City and 20-City Composites are both showing negative annual returns, a striking difference from the 15.1 percent and 14.7 percent returns they reported this time last year," he said. "The dismal growth in the 10-City composite is now at rates not seen since January 1994."

The composite month-over-month Standard & Poor's/Case-Shiller Home Price Index of 20 metropolitan areas showed a 0.6 percent drop in January to a 202.03 reading, or a 0.2 percent year-over-year loss.

Detroit and Boston led the decline in returns, opening the year with annual declines of 6.9 percent and 5.6 percent, respectively.

Seattle and Portland, areas that have shown resistance to the sharp downward trend, reported their second consecutive flat or negative monthly returns. Seattle home prices were unchanged while Portland showed a 0.3 percent negative monthly return.

Seattle and Portland gained year-over-year with annual returns at 11.1 percent and 8.7 percent, respectively.

With Phoenix and Tampa reporting negative annual returns, 11 of the 20 metro areas showed a negative year-over-year decline in January.

Charlotte, however, rebounded in January with a 7.9 percent annual increase compared to the 6.7 percent annual gain reported in the previous month. Charlotte was also the only metro area that showed price increases between December and January.

The 20 regions in the broader index are Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa and Washington, D.C..

The index was co-developed by Shiller, also a Yale University economist, who had warned of a house price bubble and predicted in the late 1990s the stock market was driven by excessive speculation.