WASHINGTON (MarketWatch) -- Home values in the U.S. fell 8.9% in 2007, the largest decline in at least 20 years, Standard & Poor's reported Tuesday.
The Case-Shiller National Home Price Index fell 5.4% in the fourth quarter alone, S&P said.
"Wherever you look, things look bleak," said Robert Shiller, chief economist for MacroMarkets LLC and co-inventor of the index.
Prices in 17 of 20 major cities were lower at the end of 2007 than at the beginning, with eight cities falling in double-digits. After adjusting for inflation in other consumer prices, home prices were lower in all 20 cities.
For the fourth straight month, nominal prices in all 20 cities were lower than in the previous month.
The biggest annual declines were seen in the former bubble areas in Florida and the Southwest. Home prices in Miami were down 17.5% in the past year, while prices fell 15.3% in Phoenix and Las Vegas.
There is an argument to be made that the Case/Shiller index overstates the decline in prices but the trend is certainly down. Prices overshot on the upside and they will probably overshoot on the downside so this is probably not over yet. There is still a lot of inventory out there and it will take either a drop in prices or a long time to get it back to normal