Home Prices Fall Below 2009 Lows

It appears as though predictions of a double dip housing recession have come true. The S&P Case-Shiller National Home Price Index declined by 4.2 percent in the first quarter of 2011, after having fallen 3.6 percent in the fourth quarter of 2010.

The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1 percent versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.

Of course, in real estate is all about location. Property is some areas is doing better than in others. With the exception of Washington, DC however, houses in major cities are still losing value.

Minneapolis posted a double-digit 10.0 percent annual decline, the first market to be back in this territory since March 2010 when Las Vegas was down 12.0 percent on an annual basis. In the midst of all these falling prices and record lows, Washington DC was the only city where home prices increased on both a monthly (+1.1 percent) and annual (+4.3 percent) basis. Seattle was up a modest 0.1 percent for the month, but still down 7.5 percent versus March 2010.

Confirms a double-dip

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities - Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa - fell to their lowest levels as measured by the current housing cycle.”

Blitzer says the rebound in prices seen in 2009 and 2010 was a temporary occurrence, largely due to the first-time home buyers tax credit. Without that artificial stimulus, housing has continued to lose value.

The Sunbelt states and industrial Mid-west continue to be the hardest hit real estate markets. Florida, Arizona, Nevada, Michigan, and Ohio are among the states with significant declines in property values.

Eleven cities and both the 10-city and 20-city Composites have posted at least eight consecutive months of negative month-over-month returns. Of these, eight cities are down one percent or more. The only cities to post positive improvements in March versus their February levels are Seattle and Washington D.C. with monthly returns of +0.1 percent and +1.1 percent respectively.