Home sales: Prices still sliding, but pace of decline has eased

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The Case-Shiller home price index, which tracks repeat sales of single-family homes, is out today. Home prices in April for the composite of 20 U.S. metro areas fell 18% from a year earlier. The L.A. area, which includes Orange County, was down 21%. The Times story is here.

Since January, the index has broken its established pattern of record-breaking declines, which had been the case for all of 2008. The current declines still are practically the same as the record 19% January year-to-year drop for the 20-city index, however. The Los Angeles area decline is down from a 25% year-to-year decline in January.

Phoenix and Las Vegas continue to post year-to-year declines greater than 30%. Phoenix prices were down 35% in April, Las Vegas prices were off 32%. San Francisco prices in April were 28% below year-ago levels.

In the Los Angeles area, there’s a substantial gap in price declines by market segment. The lowest-priced third of homes sold in April was down 54% from the peak. The highest-priced third of homes was down 31%, while mid-tier prices fell 42% from peak levels.

Low-end prices were inflated to a greater degree during the bubble, and thus had more room to fall. High-end prices didn’t rise as much, and were slower to fall due to fewer subprime loans and wealthier homeowners being able to hold out longer. Now, high-end price have taken a pretty healthy hit.

But in the real world, the picture may differ from what the data shows. High-end sales volumes in the L.A. area are tiny, so while the home price index for that segment might be down 31%, relatively few houses are selling at those prices.

Those of you tracking or shopping for high-end homes may not find many homes on the market priced at 31% below peak levels. That’s likely slowing the correction at the higher end, while foreclosures have put many lower-priced homes on the market at prices 50% below peak levels.

-- Peter Y. Hong