Survey: Home Prices Up in Half of Major U.S. Cities

Home prices up in half of major US citiesWASHINGTON - Home prices rose in August in half of major cities measured by a private survey, a sign that prices are stabilizing in some hard-hit portions of the country.

The Standard & Poor's/Case-Shiller index showed Tuesday that prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed monthly gains.

The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.

The August data provides a "modest glimmer of hope" that some areas may have bottomed out and could be turning around, said David M. Blitzer, chairman of S&P's index committee.

He noted that cities in the Midwest - Chicago, Detroit and Minneapolis - have shown some strength since May.

In Detroit, the recovering auto industry has helped lead a small rebound in the housing market. Home prices have risen 2.7 percent since August 2010, making it one of only two cities to show a year-over-year gain in that time. The other was Washington.

Detroit was one of the hardest hit after the housing bubble burst more than four years ago. Home prices there are coming off 1995 levels. So the gains are relatively small compared to how far prices have fallen.

In Minneapolis and Chicago, fewer homes are being put up for sale, leading to higher prices and better sales figures. That's likely due to fewer foreclosures in those cities. September's drop in homes for sale in the Twin Cities was the largest decline in inventory in more than seven years, according to the Minneapolis Area Association of Realtors.

Still, Robert Shiller, the co-founder of the index and a Yale economics professor, said in an interview on CNBC that overall home prices were "flat" and a recovery in the struggling housing market was not on the horizon.

The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The August data are the latest available.

Prices are certain to fall again once banks resume millions of foreclosures. They have been delayed because of a yearlong government investigation into mortgage lending practices.

"We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that `housing' is more likely to improve from here," said Dan Greenhaus, chief global strategist for BTIG. "But given the overwhelming level of inventory that remains on the market ... further price declines seem almost assured to help clear the market."

Home prices have stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, home prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.

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Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven't been enough to lift sales.

Some can't qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.

Sales of previously occupied home sales are on pace to match last year's dismal figures - the worst in 13 years. Sales of new homes fell to a six-month low in August and this year could be the worst since the government began keeping records a half century ago.

Foreclosures and short sales - when a lender accepts less for a home than what is owed on a mortgage - makes up about 30 percent of all home sales last month, up from about 10 percent in past years. The large number of unsold homes and foreclosures are sending prices lower and hurting sales.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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14 Comments

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nthereoff

Free home plus free cars for everyone. It doesn't get any better then this. I wish I knew this was coming .I wouldn't have worked for 42 years. I have all these but I paid for them

October 31 2011 at 11:40 AM Report abuse +1 rate up rate down Reply
dabrownman

Why worry? Before the next election, Obama will give everyone a free house if they promise to vote for Jive Turkeys

October 31 2011 at 9:48 AM Report abuse +1 rate up rate down Reply
Greg

At least the author has the good sense to explain in the article that the title of this article is way off-base, is an illusion.

But still, if you find a house that you love and you can afford to either pay cash or you have a backup plan to pay your mortgage should you lose your income, then go for it! It is always a good time to buy a house if you need a roof over your head and you have your finances in order!

And, remember, we are all accountable for our financial decisions. No one is holding a gun to anyone's head making them take out a mortgage!

October 29 2011 at 11:08 AM Report abuse rate up rate down Reply
dabrownman

Still, and average of down 4% from a year ago. Not good, But, houses were never considered part of net worth, wealth creation or an investment. They are just homes that shouldn't be too big or expensive for that matter.

October 28 2011 at 11:38 AM Report abuse +1 rate up rate down Reply
Fed up Senior

Leave it to the HP to start with a rosy headline and then tell us why it ain't so. One of the HUGE factors they are not mentioning is the "shadow inventory" which is all of the houses the banks are yet to foreclose on and will ultimately slam the housing market. Eventually, the banks will have to bite the bullet on this large block of real estate. They cannot simply ignore it. Most of these mortages are totally under water and the houses will offered at huge loss to get them off the books and cash in on whatever Obama giveaway that is on tap.

October 27 2011 at 9:22 AM Report abuse +1 rate up rate down Reply
DavidO

We bought a home three months before the 80's recession. It took 14 years to break even but we stayed in the home and paid our bills. Eventually things turned around. There were no bailouts then and there should be no bailouts now.

October 26 2011 at 7:55 AM Report abuse +2 rate up rate down Reply
1 reply to DavidO's comment
Greg

@DavidO, how weird, someone who has bought a house and feels as if they are accountable for their decision!

October 29 2011 at 11:05 AM Report abuse +2 rate up rate down Reply
gmydogbud

How are home prices doing in N.J.-Does anybody Know?

October 25 2011 at 6:38 PM Report abuse rate up rate down Reply
jamestcap

Yeah, I've gotten the vibes too. Unemployment has not increased, the housing decline has stopped, and if these numbers are reflected elsewhere, even reversed. There has also been modest improvement in consumer spending and GDP -- and so far only mild inflation. There are even modest signs that Europe may be settling down. I hope so. And I hope all of this is not a false dawn. Let's see how things progress.

October 25 2011 at 5:18 PM Report abuse rate up rate down Reply
seattlewkr

Are you people seriously going to believe this "glimmer of hope" in housing? Nonsense. We have runaway unemplyment and incomes declining on top of it.

No jobs, underemployment and unemployment and outsourcing all equals mega foreclosures to continue. We need our jobs back is what we need, including manufacturing.

Get real.

October 25 2011 at 5:04 PM Report abuse rate up rate down Reply
1 reply to seattlewkr's comment
savemycountry911

It is all smoke and mirrors aimed at getting Socialist, Obama re-elected.

October 28 2011 at 8:55 PM Report abuse +1 rate up rate down Reply
WILLS

Fairy tales can come true at Disneyland, Wall St. and the National association of Realtors.
All else know about reality.

October 25 2011 at 3:01 PM Report abuse +3 rate up rate down Reply
1 reply to WILLS's comment
seattlewkr

No kidding. Those are interest groups trying to manipulate the market through the media.

October 25 2011 at 5:05 PM Report abuse +3 rate up rate down Reply
1 reply to seattlewkr's comment
Master of my fate..

Better than the ussual media trying to manipulate the readers

October 28 2011 at 4:50 PM Report abuse +1 rate up rate down