October's Home-Price Drop Keeps Housing as a Major Drag

Home for saleThe U.S. housing sector received another dose of sobering news Tuesday, as home prices in 20 major cities fell a worse-than-expected 1.3% in October from September, on a non-seasonally-adjusted basis, according to the S&P/Case-Shiller U.S. National Home Price survey. That's the index's fourth straight monthly decline. Also, the 10-city index fell 1.2% in October compared to September.

Home prices in the 20-city index also fell 0.8% in October on a year-over-year basis. However, the 10-city index rose 0.2% in October on that basis. October's decline marked the first year-over-year drop for the 20-city index since January.

A Bloomberg survey had expected home prices in the 20-city index to fall 0.7% in October from September, and 0.2% on a year-over-year basis, after falling a revised 0.8% in September from August, and 0.6% year-over-year in September.

"There Is No Good News"

David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said concerned about a double-dip recession in home prices is warranted. "The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October's report. Home prices across the country continue to fall." Blitzer said, in a statement.

"The trends we have seen over the past few months have not changed," he said. "The tax incentives are over, and the national economy remained lackluster in October, the month covered by these data. Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism."

In October, all 20 metropolitan statistical areas (MSAs) in the 20-city and 10-city indexes were down compared to September, Blitzer added. Further, while not always consecutive months, 12 of the MSAs and both indexes have posted at least six months' of decline since the beginning of 2010.

Monthly price drops in October in major U.S. cities were as follows: New York, 1.6%; Chicago, 2%; Boston, 1.2%; Washington, D.C., 0.2%; Atlanta, 2.9%; Tampa, 0.9%; Miami, 1.1%; Dallas, 1.1%; Denver, 0.6%; Los Angeles, 0.7%; San Francisco, 1.9%; and Seattle, 1.3%.

October's home price report is an unqualified negative. As the impact of the homebuyer tax credit waned, home prices have stagnated. The large inventory of unsold homes is likely to continue to place downward pressure on home prices at least through early 2011, and probably for longer. Until both existing- and new-home sales rise in a sustained way to lower those high inventories, home prices will keep struggling.

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afrokrackharmon's vote is just as valuable as a normal person's vote.

December 29 2010 at 6:52 PM Report abuse rate up rate down Reply

Banks, Realtors and Mortgage companies hope consumers will be stupid just one more time!!!!!I don't think it will happen

December 29 2010 at 8:42 AM Report abuse +1 rate up rate down Reply

when seller wants 200% profit--then buyer refuses?? In California, houses are inflated by 300%

December 29 2010 at 8:39 AM Report abuse +2 rate up rate down Reply

I blame our consumers and their stupidity

December 29 2010 at 8:36 AM Report abuse +2 rate up rate down Reply
1 reply to fakeconomics1's comment

I blame Washington, it's too easy for the banksters to go to the FREEdie Mac and Fannie Mae I have more money cash it out machine being run by Barney Frank.
The house is foreclosed on, the bankster runs to Washington with the mortgage note, doesn't make a difference if it's someone else's note, Washington doesn't look at anything. (look how many illegal alliens our on the roles)
Cash it out. Get the money Thanks Barney Sell the house, get the money again, REPO 105 write it off as a loss get the money again, and sell the house get the money again. That is 4 x's on one house. and there are 8 million foreclosures out there. Do the math. That's why the banksters don't want to do HAMP.

December 29 2010 at 8:45 AM Report abuse rate up rate down Reply

The problem is don't buy a hpose if you can;t afford it.Its that simple.

December 29 2010 at 8:36 AM Report abuse +1 rate up rate down Reply
1 reply to cozypaws's comment

No cozy paws, 50% of Americans have lost their jobs. They can't make the payments all the time. There is a program for that, but our friends the banksters who got bailed out on the taxpayer's dime don't want to work with the homeowner. 10 million people are out of work, and 8 million foreclosures. what does that tell you. It tells me that no one is buying houses, IN simple terms no one can afford anything.

December 29 2010 at 8:40 AM Report abuse rate up rate down Reply

Let's put the blame where the blame needs to be, WALL STREET, THE TOO BIG TO FAIL BANKSTERS, AND WASHINGTON. Evenutually the banks are going to fail 98 banks failed already this year. Twice as many as last year. Allstate just sued CoutryWide/BofAmeria and Monzilla for trading toxic dervatives (CDO's). The suit claims that the dervatives were made to look attractive on the market even though the seller's, ratings companies, and the banks knew they were toxic. That's fraud people. And Collusion. For three years this administration Pres. B O and Washington have propped up these banksters, and let US go unemployed, Seniors without COLA"S for two years now, creeping high gas and food prices, it's time to stop complaining and do something. Come January 3rd on MOnday I am going to start a new resolution, I will either call or email my wonderful Fed. Senators Casey and Toomey and my Congressman Charlie Dent. On Tuesday, my state officials, and Wed. my local rep. And then start over again. 2011 is the year the US citizen takes back the country. Don't buy Chinese goods. or any foreign goods if you can -- I did not do any shopping at a mall this year, or Walmart.
I shopped in little Main Street stores. I supported a Mom and daughter who make the yummiest chocolates !!! It's time to stop the whine and do some time, at the computer and let those Washington nit wits know we HAVE HAD ENOUGH!!! You want to stop the housing crisis, put the banksters in jail, work with the underwater homeowner, cripes there are 400 programs out there, pick one or even two. Did you notice that for the two months this country was in foreclosure freeze the housing market creeped back. HELLO didn't anyone put this together. NO Coincidences.

December 29 2010 at 8:32 AM Report abuse +3 rate up rate down Reply

Real housing crisis begun in 2004 and 2005-------Banks thought it was a temporary and refuse to believe

December 29 2010 at 8:31 AM Report abuse +2 rate up rate down Reply

There are millions of homes that are waiting to hit the market and Banks do not want to flood the market

December 29 2010 at 8:29 AM Report abuse +1 rate up rate down Reply

Obama and Bush----two sides of the same coin----we need to change fundamentally- instead of being brainwashed by Wallstreet, Bankers and Mortgage experts

December 29 2010 at 8:24 AM Report abuse rate up rate down Reply

This housing crisis had nothing to do with Obama.Wall Street Under the BUSH Administration leveraged their investment banking to over 30 to one.They encouraged the sale of homes and sold bogus mortgages in the form of derivitves they packaged and sold throughout the world.The major rating agencies were also complicit in this fraud by stamping these toxic derivitives AAA knowing they were bogus.Proof that Wall Street knew these derivitives were toxic was their purchase of Default Swaps from AIG hedging their losses on these bogus products.Goldman Sachs was one of the biggest violaters of this fraud and guess who was the CEO of this company prior to becoming the Secretary of Treasurer under BUSH.Yes one Hank Paulson.The same Hank Paulson that told us the sky was falling and bailed out his buddies 100 cents on a dollar with taxpayer funds.These criminals should be prosecuted but Obama like all politicians get campaign contributions from these banksters and therefore is not interested in exposing these fraudsters .

December 29 2010 at 8:21 AM Report abuse -1 rate up rate down Reply
1 reply to wc92264's comment

And don't forget Timmy Geithner the other fox in the chicken house. Both Obama and McCain got money from the banksters. The banksers were playig both sides of the fence with their ill gotten $money$ It's all about the MOney OURS.

December 29 2010 at 8:36 AM Report abuse rate up rate down Reply