Home prices see record plunge

By Julie Haviv

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.6 percent in August from a year earlier and plummeted more than 30 percent in Las Vegas and Phoenix, Standard & Poor's said on Tuesday.

Home prices in 20 major metropolitan areas fell 1.0 percent in August from July, according to the Standard & Poor's/Case-Shiller Home Price Indices.

The composite index of 10 metropolitan areas declined 1.1 percent in August from July for a 17.7 percent year-over-year drop, also a record, S&P said in a statement.

"The downturn in residential real estate prices continued, with very few bright spots in the data," David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in the statement.

A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, deflating a bubble from the early part of this decade.

For the fifth straight month, prices fell in every region on an annual basis, he said.

Both the 10-city and 20-city indices have fallen from a year earlier for 20 consecutive months. In 13 cities, annual returns worsened from last month's report, he said.

"As seen throughout 2008, the Sun Belt markets are being hit the most," he said.

Prices in Miami, San Francisco, Los Angeles and San Diego all dropped in excess of 25 percent, he said.

The sharp declines in these regions of the country are in stark contrast to other areas, according to Michelle Meyer, an economist at Barclays Capital in New York.

"It is interesting to see the split in home prices on a regional basis and it is clear certain areas are bringing down the national average," she said.

The previously "bubble" areas, which had a large presence of risky lending and speculation, are struggling with a rising share of foreclosures, which have boosted sales but have depressed home prices, she said.

"Home prices continue to fall sharply in these areas, but prices have started to stabilize or even increase in other areas," she said.

For the August/July period, prices rose in only 2 regions, Cleveland and Boston, S&P said.

S&P noted one bright spot as the acceleration in decline was only moderate in August from July.