Home prices post record decline  

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Home prices fell 6.7 percent in October, compared with a year ago, according to the S&P/Case-Shiller 10-city home-price index. It was the largest drop recorded since the index began in 1987.

It marked the 10th consecutive month of price depreciation and 23 months of decelerating returns.

"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert J. Shiller, chief economist at MacroMarkets, in a statement.

Case-Shiller's 20-city index fell 6.1 percent. Shiller noted that 11 of the markets in the 20-city index posted a record fall.

"This is just the beginning," said Peter Schiff, a Darien, Conn.-based investment adviser known for his bearish views of the housing market. "Pressure is there for much, much lower prices."

According to Schiff, one factor that will drive prices lower is a change in buyer psychology. "The prices that existed were completely artificial, a function of speculators who are no longer in the market," he said. "Some buyers thought they were going to get rich."

Today, however, that demand has all but disappeared. "More people want - or have - to sell," said Schiff, "because prices aren't going up, so buyers have to look at the actual cost of owning a home."

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