MODEST SALES GAINS IN THE DEPRESSED HOUSING MARKET HAVE YET TO LIFT PRICES
The Standard & Poor's/Case-Shiller home price
index shows prices dropped in December from
November in 18 of the 20 cities tracked. The
steepest declines were in Atlanta, Chicago and
Detroit. Only Miami and Phoenix saw an increase.
The declines partly reflect the typical slowdown in
the Fall and Winter. Prices in Atlanta, Las Vegas,
Seattle and Tampa dropped to their lowest prices
since the housing crisis began.
"We are 25 years back on our prices" reported a
spokesman, with a median existing home price of
$100,000 in January, down from $104,900 in December.
Las Vegas led the nation with 40 to 50 percent home
price appreciation during the boom years of 2004 and
2005. Then came the crash. Prices have plummeted
65 percent from their peak.
Nationwide, prices have fallen 34 percent since the
housing bust, and are now back to 2002 levels.
"The pick-up in our economy has simply not been
strong enough to keep home prices stabilized."
There is hope among some economists that an increase
in sales could stop prices from falling further later
this year. "There are compelling reasons to believe
that the end of the housing crash is finally in sight."
Home prices tend to follow sales by about 6 months.
When sales rise, prices rise too, and an increase in
prices would likely create a positive cycle.
The Case/Shiller monthly index covers half of all
U.S. homes. It measures prices compared with those
in January 2000 and creates a 3 month moving average.