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Price declines pass Depression-era levels

January 13, 2011 - Buyers moving into new homes today are encountering properties worth over 25 percent less compared to their values during the housing market's peak.

New data from Zillow.com showed that national home prices dropped 26 percent from June 2006 to November 2010, a rate of decline which surpassed levels from the Great Depression. During a five-year period from 1928 to 1933, home prices declined 25.9 percent, said the report. November brought the 53rd consecutive month of national home price declines, according to Zillow, which pinned the median price of U.S. homes at $177,412, comparable to levels seen in October 2003.

Additionally, the report shows buyers relocating to homes in November 2010 saw property values that were 5.1 percent lower than a year earlier. But the news wasn't all grim for housing, said experts.

"There are signs that the broader economy is doing better than it was just three months ago," wrote Zillow chief economist Stan Humphries in a blog. "This will ultimately help the housing market, primarily in the form of decreased unemployment which will increase household formation and consumer confidence."

Last week, the Department of Labor reported that the national unemployment rate was down to 9.4 percent as the economy added more than 100,000 new jobs.
 

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