House price declines slowed in April; stabilization appearing

While home prices in many metropolitan areas did fall from March to April 2009, the decline in most metropolitan areas was much slower than in previous months, according to today's S&P/Case-Shiller Home Price Index. The home prices in the 10-city composite dropped 0.7 percent and in the 20-city composite dropped 0.6 percent.

Dallas showed the best results with a price increase of 1.7 percent. Other cities that saw minimal increases included Cleveland (1.2 percent), Denver (1.5 percent), San Francisco (0.6 percent), Seattle (0.2 percent) and Washington DC (0.8 percent).

Most cities that saw a decrease in price, saw prices drop less than 1 percent, but there were some bigger losers. Las Vegas was hit the hardest with a 3.5 percent drop. Its prices have fallen more than 50 percent since June 2006. The next hardest hit was Phoenix, which was down 2.2 percent. Phoenix's prices have dropped 54.1 percent since its peak in June 2006. Other cities that saw drops higher than one percent include Detroit (down 1.5 percent), Miami (down 2 percent), and New York (down 1.7 percent).

"The pace of decline in residential real estate slowed in April," David Blitzer, Chairman of the Index Committee at S&P wrote in a press release. "While one month's data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here."

Annual returns for the 10-city and 20-city index showed a decline of 18 percent and 18.1 percent, respectively. These are improvements over their returns reported for March when the indexes showed an annual decline of 18.7 percent. For the past three months, these city composites have recorded an improvement in annual returns. In January both indexes showed a bigger annual drop, 19.4 percent in the 10-city index and 19 percent in the 20 city index.

While no homeowner wants to see a drop in price, clearly the index is showing a decrease in the price carnage. Now that three months of data show a slowing of house price declines, we may actually have some proof we're nearing the bottom on the house price fall. But we will have to wait until after prime selling season of 2009 to know for sure.

Lita Epstein has written more than 25 books including The 250 Questions You Should Ask About Buying Foreclosures."


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