Survey: Home Prices Down in Most Major US Cities

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Survey: home prices down in most major US citiesWASHINGTON (AP) - U.S. home prices are falling again in most major cities after posting small gains over the summer and spring. The report suggests the troubled housing market remains weak and won't recover any time soon.

The Standard & Poor's/Case-Shiller index released Tuesday showed prices dropped in September from August in 17 of the 20 cities tracked. That was the first decline after five straight months in which at least half the cities in the survey showed monthly gains.

A separate index for the July-September quarter shows prices were mostly unchanged from the previous quarter.

Americans are reluctant to purchase a home more than two years after the recession officially ended. High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history haven't been enough to lift sales.

David M. Blitzer, chairman of S&P's index committee, said that while the steep price declines seen between 2007 and 2009 appear to be over, home prices are down from the same time last year and do not show signs of easing.

"Any chance for a sustained recovery will probably need a stronger economy," Blitzer said.

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The largest monthly price declines were in Atlanta, San Francisco and Tampa, Fla. And prices in Atlanta, Las Vegas and Phoenix fell to their lowest points since the housing crisis began four years ago. Blitzer called the new lows reached in those three cities a "bit disturbing."

New York, Portland, Ore., and Washington were the only cities to show monthly price increases in September.

A majority of the cities tracked by the survey posted modest price increases from April through August, the peak buying months. The monthly changes are not adjusted for seasonal factors.

Even with the gains, home prices were down in all but two major cities in September from the same month one year ago.

Sales of previously occupied homes are on pace to match last year's dismal figures - the worst in 14 years. And sales of new homes are shaping up to be the worst since the government began keeping records a half century ago.

Some people 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 prices will keep falling.

"Despite record high affordability of real estate, the psychology of home buyers is still being weighed down by economic uncertainty, keeping them on the fence when it comes to buying homes," said Stan Humphries, chief economist at Zillow.com, which measures home values.

Atlanta has been especially hard hit in the past year. Prices there dropped nearly 6 percent in September and have fallen nearly 10 percent over the past 12 months.

Since the fall of 2008, one out of every four sales in Atlanta has been a foreclosure, an auction or a bank sale.

Many homes there were built during the housing boom. The city has also been confronted by high unemployment. In September, the unemployment rate was 10.3 percent - more than a point higher than the national average.

The Case-Shiller index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The September data is the latest available.

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

Home prices had stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, 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.

Foreclosures and short sales - when a lender accepts less for a home than what is owed on a mortgage - are selling at an average discount of 20 percent.

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7 Comments

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jdykbpl45

Got hope? Need Change? Just say no to Obama.

November 30 2011 at 5:03 PM Report abuse +1 rate up rate down Reply
whitehouse3346

It is beyond my wildest thoughts that the man that caused this mess is now almost the favorite of Repubs to be President... Yes, Newt! Newt as Speaker of the House in 1995 got the entire Repub Senate and House to all controlled by Repubs to revoke Glass-Stegal Act which was created after the last great depression. Yes Newt let Pandora out of the box after the evil was locked up. It is thanks to Newt that we are in this mess. Of course the same people that controlled the repubs controlled the puppet Clinton in the Oval Office that signed it. Had it not been for Newt's leadership and fervor to reward lobbyists bankers and wall street with new fodder to engorge themselves with via our money and our homes and our lives.. we wouldn't even be seeing headlines like this. Now they want him for President? Jesus Christ! Think again the only person that should be the next President of the bunch of cronies including Obama is Ron Paul. He is tried He is true He isn't cute or eloquent but he needs to be President.

RonPaul.com Please for the sake of the USA as we used to know it Vote and support Ron Paul

November 29 2011 at 3:36 PM Report abuse -2 rate up rate down Reply
SPQR

Owning a home is nice if you can afford it. Everything is breaking all at once in my house and no matter what I do I will never get the money back. I would think that houses are here to stay, but prices are too high. People did it to themselves, they borrowed and sunk all that money back into their homes. They are now broke but have nice homes. Millions of people will lose their homes in the next few years. This could be the end of the US as we know it

November 29 2011 at 1:30 PM Report abuse rate up rate down Reply
hustonlaw

Even Martin Feldman, the extreme right leaning economist, recently wrote an op ed piece in which he opined that the only answer for the housing collapse is some form of across-the-board principal reduction for all housing (not just for those who haven't kept up their mortgage payments for various reasons). Of course, right winger that he is, he thinks this must be done (somehow) voluntarily.

To fine-tune Mr. Feldman, what needs to be done through a national conference sponsored and joined by all affected groups and the government is a principal reduction effort, whose outcome would be incorporated in the HAMP program, featuring the concept of a five-year, one-third, reduction in mortgage principal for all owner/occupier homeowners with mortgages, tempered by a split in any profit or loss between homeowners and lenders during the five year period, and with some form of government guaranty for the reduced principal balances.

November 29 2011 at 1:17 PM Report abuse rate up rate down Reply
Frank

Lets see. 27% of mortgages underwater. 4,000,000 homes in pre-foreclosure pipeline. Seems like it has to get worse before it gets better, which it will, but it's going to take many years to do so.

November 29 2011 at 9:51 AM Report abuse +3 rate up rate down Reply
2 replies to Frank's comment
Greg

@Frank, it's not so much the underwater mortgages or the homes in the pre-foreclosure pipeline or the shadow inventory that banks are holding, etc., that will be the big problem.

The government just can't keep it's hands out of the market, can't keep coming up with ways to "help" people. If the government had left the market alone several years ago, we'd see a correction now. But no, the government keeps coming up with weird, failed attempts. THAT'S what's going to hold the prices down for years and years, ongoing government intervention.

November 29 2011 at 12:27 PM Report abuse +3 rate up rate down Reply
Greg

I've had to move around the country to stay employeed for over 30 years straight, so I knew that I could never buy a house and settle down in one place. Otherwise, I'd be asking the government to make my house payments right now, because even after 30+ years of employment, I'm looking for a job and my search includes global locations.

There is no such thing as long-term employment with a single company. (I'm not being cynical, just telling it like it is, for better or worse.) Frankly, unless you have your own successful business in a given location, or you've just inherited the family mansion along with enough money to kick back and enjoy the good life, I can't imagine why anyone would buy a house/condo/anything. Why tie yourself down to a ball and chain of a house?

November 29 2011 at 9:50 AM Report abuse +2 rate up rate down Reply