You know the housing market is lousy when the only positive comment one of the nation’s leading experts on property values can come up with is: “prices can’t keep declining at this rate forever.”

That assessment was courtesy of Robert Shiller, co-creator of the Case/Shiller Home Price Index, which recorded the worst price declines on record in January. The 20-city index slid 19% from a year ago and 2.8% from December 2008. The index now sits at levels not seen since late 2003.

All 20 cities recorded price declines, with Phoenix and Las Vegas faring the worst. Dallas and Denver held up the best, or least bad as it were, registering year-over-year declines of 4.9% and 5.1% respectively. Notably, a few cities actually reported declines that were less severe than last month: Boston, Denver, Los Angeles, San Diego and Washington D.C.

The Case/Shiller Index is viewed by many as a more accurate representation of property values than measures of median (or average) home prices. The index measures “paired sales,” or homes that have recent sales to compare against. This allows statisticians to compare apples to apples, where as median price data can be skewed by the mix of homes sold in a given time period. If more cheap homes are selling, while expensive ones are sitting on the market, median price data will show price declines that may not be representative of true property values as a whole.

For more on this scintiliating statistical debate, check out Austin Nelson’s “Deconstructing the Average.“

This entry was posted on Tuesday, March 31st, 2009 at 3:37 pm and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.