Home Prices Update: 11 of 20 Cities See Declines

Foreclosure MediationHome prices barely managed an uptick of 0.6 percent in February based on a leading nationwide index, but it was the first year-over-year increase since late 2006.
It was a very slight increase, however, for the overall index covering 20 cities. Prices were supported by homebuyer tax credits of up to $8,000 that expire April 30.
But in a troubling trend, 11 out of the 20 cities tracked by the Standard & Poor’s/Case-Shiller home price index showed declines compared to February of last year.
Six cities – Charlotte, Las Vegas, New York, Portland, Seattle and Tampa – saw their lowest levels since prices peaked three to four years ago. Las Vegas, one of the hardest hit communities in the nation by foreclosures, saw the biggest drop with 14.6 percent.
The 11 cities with declines are: Atlanta (-0.9%); Charlotte (-2.5%); Chicago (-3.0%); Detroit (-5.4%); Las Vegas (-14.6%); Miami (-4.4%); New York (-4.1%); Phoenix (-1.6%); Portland (-4.8%); Seattle (-5.6%); and Tampa (-6.0%).
Cities with gains of 5 percent or more: San Francisco; Los Angeles; San Diego; and Washington.
Nationally, home prices are up only 3 percent from the bottom in May 2009.
The update on home prices primarily signals a still weak recovery that may regress a bit before regaining substantial momentum, said David Blitzer, chairman of the S&P index committee.
“These data point to a risk that home prices could decline further before experiencing any sustained gains,” Blitzer said. “…this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering.”
Beginning in November of last year, each home price update showed gains as fewer cities reported year-over-year declines than in the previous month. But those gains ended with today’s report.
However, housing market reports from last week showed that March saw significant gains in new and existing home sales, heavily influenced by the expiring tax credits.
“However, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years,” Blitzer said. “As these homes are put up for sales, we may see some further dampening in home prices.”
The Case-Shiller index measures activity from a basis of 100 relative to prices in January 2000. The index was at 144.03 in February 2010.

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