S&P Case/Shiller Home Price Index data released this week showed that home prices in every region of the country continued to fall.
Tuesday’s 2.5% decline marked the 31st consecutive month that home price data has fallen. The 10-city index has been falling steadily since June 2006 with prices falling some 30% from the peak. For the year, the 10-city index has dropped 19.5%.
EXODUS FROM PHOENIX
Phoenix has been hit the hardest with home prices falling 5.5% in the month month period ending on January 2009. For the year, home prices in Phoenix have fallen 35%. Las Vegas and San Francisco have also experienced 30+% price drops in the past year.
Dallas, Cleveland and Denver have held up best in the past year with these cities experiencing moderate declines of around 5%. 
While real estate has done poorly in the past five years, over longer periods it has done well, especially in New York, Washington and Los Angeles. Only Detroit, which is now depressed because of the failing auto industry, has lost value in the 10 year period.
Those who have used real estate as a long-term wealth building strategy will be happy to know that on average, residential real estate has gained 75% on average compared with a 35% loss in the stock market as measured by the S&P 500.
While the housing price index remains well above the stock market index over the ten year period, it may not yet be time to get back into either market. If real estate and the stock market are both hedges against inflation, then perhaps neither market is the place to be. In this moment, there is little worry about inflation.
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