US Home Prices Slump Again, Hitting New Lows

By David Streitfeld, The New York Times

25 January 11

he long-predicted double-dip in housing has begun, with cities across the country falling to their lowest point in many years, data released Tuesday showed.

Prices in 20 major metropolitan areas fell 1 percent in November from October, according to the Standard & Poor's Case-Shiller Home Price Index. The index is only 3.3 percent above the low it reached in April 2009 and has fallen fell 1.6 percent from a year ago.

"A double-dip could be confirmed before spring," the chairman of S&P's index committee, David M. Blitzer, said.

Eight of the 20 cities in the index fell to new lows for this cycle, including Atlanta; Charlotte, N.C.; Portland, Ore.; Miami; Seattle; and Tampa, Fla. Only a handful of places - essentially California and Washington, D.C. - saw prices rise.

Analysts said the declines would continue even if they would be nowhere near as intense as in 2007 and 2008.

"The enormous supply overhang of existing homes (particularly factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time," Joshua Shapiro, the chief United States economist of MFR Inc., said.

The housing market, which usually leads the economy out of a recession, is holding it back this time. New home sales are in the doldrums and mortgages are hard to come by. Government programs have stanched the bleeding but do not provide permanent relief.

In some cities, the decline over the last year was quite sharp.

Prices in Atlanta and Chicago fell more than 7 percent, exceeding even the drops in the perennially troubled Detroit and Las Vegas.

The Case-Shiller Index is a three-month average of prices. One hopeful sign is that on both a seasonally adjusted and an unadjusted basis, the declines measured in November were less than in October.

The 20 cities fell 0.5 percent on seasonally adjusted basis in November after a 1 percent drop in October.