 According to the Case-Shiller home price index released Tuesday, home prices across 20 major U.S. cities dropped a record 15.3% from April 2007 to April 2008. The real estate news headlines accordingly will be bleak in the morning. Home prices are now down to where they were in the summer of 2004, according to the Case-Shiller home price index tracked by Standard & Poor's. Prices in the 20 cities included in the index are now down 17.8% from the peak for home prices two years ago. The Office of Federal Housing Enterprise Oversight index, also released Tuesday, showed a smaller 4.6% annual decline from April 2007 to April 2008. The OFHEO index is based on a broader sampling of real estate markets, but covers only those homes financed with conforming loan products. There are limitations to the Case-Schiller index, though it is widely followed by Wall Street investors. Among the limitations are that only 20 major cities are tracked and these are the highest priced areas in the country and, therefore, some of the hardest hit in the credit crunch and housing slowdown. Another limitation of the index is that the Case-Shiller methodology excludes homes that have had improvements in an attempt to account for the fact that the new buyer is purchasing a home that is really different from the home that the seller purchased. By this exclusion, however, the index eliminates the relatively attractive homes and limits its measurement to what are generally called "outdated homes." This methodology becomes statistically insignificant in a smaller market like Flagstaff, which is why the index tracks only major cities. The only positive news in today’s housing report was that the drop in home prices from March to April (1.7%, according to Case-Shiller) was the smallest monthly decline in seven months. This, perhaps, indicates a slowing on the downward trend? Or, it could merely be a reflection of the onset of the Spring house selling season – normally a time for upticks in prices in many real estate markets. For more information on the various housing indices, check out this post: What Does the Latest Housing Data Mean for Flagstaff? For more information on today’s news, read the MarketWatch report. | 
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