Home prices are lowest since 2002
By Les Christie | CNNMoney.com – 1 hour 6 minutes ago
National home prices fell 4% in the fourth quarter of 2011, putting them back at levels last seen in mid-2002. That's the fifth consecutive annual loss and the biggest decline since 2008, when markets were in free fall and prices plummeted more than 18%. Prices have been falling since they topped out in 2006, and are down 33.8% from their peak, according to the S&P/Case-Shiller national home price index. "The housing market ended 2011 on a very disappointing note," said David Blitzer, spokesman for S&P. "While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended." After prices fell sharply in 2007 and 2008, declines over the past three years have been more modest. Many analysts thought markets were bottoming out and would soon stabilize, and even pick up. The last quarter of 2011, when national index prices fell a steep 3.8% from the third quarter, may have dashed those hopes. "While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended," said Blitzer. The S&P/Case-Shiller 20- and 10-city indexes recorded similar sharp declines during the quarter. Among individual cities, Atlanta recorded a 12.8% year-over-year fall, the worst of any city. Other big losers were Las Vegas, down 8.8%, Chicago which fell 6.5% and Seattle, which declined 5.6%. Detroit, where prices crept up 0.5% for the year, was the only city in the 20-city index to register a gain. In the past five months prices have declined at an annualized rate of more than 6%, according to Dean Baker, director with the Center for Economic and Policy Research, a trend he said is especially troubling. He cites some reasons for hope, however. Multi-million dollar foreclosures "Case-Shiller is a lagging indicator and most of the contracts reflected in this report were signed in August and September," he said. "The latest economic data shows a much brighter picture." Industrial production has been up and unemployment has dropped. "The economy is stronger now than in the first half of 2011 and that will filter down to home prices," said Baker. View this article on CNNMoney |
