L.A. home prices continue their descent

The most recent Case-Shiller numbers for August 2008 are out, and they're continuing to show sharp pricing declines from last year. But what's interesting to me is that the price declines -- at least so far -- have been far sharper for homes priced under $380,000 (-39%) than for those priced in the top third, or over $573,000 (-19% decline).

So can these higher-priced homes continue to hold their values, or are they destined to fall further to match the sharper decline in cheaper homes -- which have historically provided the required equity to move up to pricier homes? Given the economic fundamentals at work, I think it's just a matter of time before we see sharper declines at the higher end.

From an L.A. Times story:

The Standard & Poor's /Case-Shiller index of home prices in 20 metropolitan areas was down 16.6% in August from the same month a year ago. Los Angeles and Orange County home prices were down 26.7% in August compared with August 2007...

Close behind in their August annual price drops were Miami (28.1%), San Francisco (27.3%) and San Diego (25.8%).

The smallest August yearly declines were in Dallas (2.7%) and Charlotte (2.8%).

In the Los Angeles area, lower-priced homes showed greater price declines than the high end of the market. The lowest-priced third of homes, those under $380,000, declined 39% in value in August compared with August 2007, according to the index. Prices of the top third of homes, those priced above $573,000, fell 19% in August compared with a year ago.

Lower-priced Los Angeles area homes dropped 42% from their fall 2006 peak price. The highest-priced third of Los Angeles area homes were down 21% from their peak in the summer of 2006.

Overall, Los Angeles area home prices were down 31% from their fall 2006 peak and matched spring 2004 prices.

Click here for full story.