Home Prices Hit Lowest Levels Since Housing Crisis BeganJust when it looked like housing prices were bottoming out and now was the time to snap up the best bargains around comes news that may make you want to cool your heels. The latest updates on the S&P/Case-Shiller Home Price Indices were released on Tuesday, and they paint a picture of deteriorating prices that have continued to descend.

The S&P/Case-Shiller U.S. National Home Price Index fell 4% in the fourth quarter, compared to the same period in 2010. Meanwhile, Case-Shiller's 10-City Composite was down 3.9% in December compared the previous year, while the 20-City Composite dropped 4%.

All three composites hit new post-housing-crisis lows. Moreover, the metropolitan city performance was worse than November, when the annual level for housing prices in both the 10-City and 20-City composites each fell 3.8%, according to the report.

David Blitzer, S&P Indices managing director and chairman of the Index Committee, provided the narrative behind the numbers in a statement: "After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today's report we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011."

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Economists point to an abundant supply of homes for sale and a large backlog of foreclosed homes as contributing to the declining prices. It's a simple case of supply and demand, and currently supply is bulging.

The National Composite, meanwhile, is down a whopping 33.8% from its peak in the second quarter of 2006, just before the housing crisis began.

Among the 20 major metropolitan areas, Detroit was the only one to post a year-over-year gain in December. That strength was also seen in the Motor City's results in November. Atlanta, meanwhile, posted another double-digit decrease in housing prices and maintained its status as the nation's hardest-hit city based on its annual rate of decline.

Here's a look at how the nation's top 20 cities fared in December, compared to year-ago figures:

S&P/Case-Shiller Home Price 20-City Composite Index













































Source: S&P Indices and Fiserv

Although sales of existing homes are on a rise, Blitzer and other economists warn it doesn't necessarily mean folks should expect home prices to follow.

Blitzer, in a previous interview with The Motley Fool, noted: "Home prices are usually one of the last things that improve. First, you'll usually see more foot traffic [with prospective buyers], then you'll see sales improve and then prices will begin to move up."

That last leg of prices moving up, however, may be awhile in coming.

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To me the investment I make in my home is emotional. Its worth it to me . I love my house. Yes it needs work, what home doesnt? But I love it all of it. It makes me happy. Thats what matters to me.

March 03 2012 at 8:00 AM Report abuse rate up rate down Reply
Neal Moss

The downward price adjustments that have been occurring are just bringing home prices closer to reality. We are not quite there yet. If you disagree, then you are likely either delusional or greedy. Unless one is purchasing rental property, a home should be a place to live, not an investment. In fact, ask any expert, and they will tell you that a home is a liability, not an asset. Greedy and ignorant consumers are a huge part of the economy problem and are just as much at fault for the mortgage bubble and its bursting as are Wall Street, our government, and the mortgage industry.

March 03 2012 at 1:04 AM Report abuse rate up rate down Reply

Thanks Jimmy Carter Part Deux, 3 years and still falling. Thanks alot.

March 02 2012 at 10:38 PM Report abuse rate up rate down Reply

South Texas prices have help pretty steady the last 3yrs.

March 02 2012 at 8:10 PM Report abuse rate up rate down Reply

South Texas prices have help pretty steady the last 3yrs.

March 02 2012 at 8:10 PM Report abuse rate up rate down Reply

This news is no surprise

March 02 2012 at 7:32 PM Report abuse rate up rate down Reply
Len Robertson

If you aren't selling your house, what does it matter?

March 02 2012 at 7:25 PM Report abuse rate up rate down Reply

What would you expect with the dumb leader we have now. It will get worst.

March 02 2012 at 4:21 PM Report abuse +1 rate up rate down Reply
2 replies to pbgardenpet's comment

Got that right. No matter how much propapganda he spews it does not change reality

March 02 2012 at 7:29 PM Report abuse +1 rate up rate down Reply

No matter what propaganda he spews it does not change reality

March 02 2012 at 7:30 PM Report abuse rate up rate down Reply

Being in the business for 26 years I can assure you that the blame for this mess was with the credit rating agencies, Standard & Poor, Moody's and Fitch. Though Barney Frank pushed FNMA & FHLMC to do toxic loans for people who never should have recieved them (afirmative action housing), it was the credit rating agencies that rated those mortgage securities as AAA when it should have been rated C at best. Now those who held that "paper" also carried "insurance" in case of default, called a "Credit Default Swap" but they were paying next to nothing in premiums on those insurance policies because they were rated so high. Look at it this way: It's like a life insurance company charging premiums based on a 21 year male in excellent health thinking they would collect small premiums for the next 30 years, then two years later everyone "dies" and you have to payout all those death claims. That is what caused market crisis and why we had to bail out the banks.

March 02 2012 at 4:03 PM Report abuse rate up rate down Reply

Obama and his democratic allies promoted the Community Reinvestment Act that allowed stated, interest only, adjustable, balloon loans to unqualified buyers thus causing the housing bust. Anyone who is underwater should blame Obama and the democrats (Barney Frank, Chris Dodd, Harry Reid and Charles Schumer) for their state. Lost home equity and retirement dreams becoming a nightmare. All because of Obama & Company!

March 02 2012 at 1:08 PM Report abuse rate up rate down Reply
2 replies to wongtpa's comment

Excuse me? The bust was in full swing long before Obama was elected. If the Bush administration had simply pushed for an increase in interest rates, it would have slowed down the rush to buy. Low interest rates encourage people to take on more debt because, the average person only looks at how much the monthly payment is. They gave no consideration to the actual cost to produce those homes. If they had, they would have known they were being led down the proverbial "Garden Path."

March 02 2012 at 2:04 PM Report abuse -1 rate up rate down Reply
1 reply to AYSKOFI's comment

If you remember sub prime loans were a Democrat program

March 02 2012 at 7:31 PM Report abuse rate up rate down

What planet are you living on? Free market principles were at work. A property is worth whatever someone is willing to pay for it. True in 06 and true today.

March 02 2012 at 3:46 PM Report abuse rate up rate down Reply