3/29/11, "Home price declines deepen in major US markets," AP, Herron and Kravitz
"Damage from the housing bust is spreading to areas once thought to be immune.
In at least 14 major U.S. metro areas, prices have fallen to 2003 levels -- when the housing bubble was just starting to inflate. Prices will likely drop further this year, making many people reluctant to buy or sell.
- That would push down sales and prices more.
The depressed housing industry is slowing an economy that has shown strength elsewhere. And it's starting to hurt those who bought years before the housing boom began. In some cities, people
- who have paid their mortgages for a decade have little or no home equity.
Prices have tumbled in familiar trouble spots, such as Las Vegas, Cleveland and Detroit. But they're also at or near 10-year lows in Denver, Atlanta, Chicago and Minneapolis -- cities that weren't as swept up in the housing boom and bust....
Just about the only major market weathering the second wave of the housing downturn is Washington. Home prices there have risen
- 11 percent in the past two years.
Prices fell from December to January in all but one of the 20 cities tracked by the Standard & Poor's/Case-Shiller home price index. The index dropped for a sixth straight month. Prices in 11 of the cities are at their lowest point since the housing bubble burst....
- "The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.
Weak home sales and falling prices are imposing a heavy burden on the economy, which has gained strength from higher consumer spending....
Sales of previously occupied homes are coming off their worst year in more than a decade. And new homes are selling at the
- slowest pace on records dating to 1963.
In part, the weakening prices show how much a home-buying tax credit stimulated sales in late 2009 and early 2010. Once those tax credits expired in April, many markets began a decline that shows no sign of stopping. Some economists say the tax credits merely postponed the bottoming out that's occurring now.
Millions of foreclosures and short sales are largely to blame. Short sales occur when lenders let homeowners sell for less than they owe on their mortgage. Those cut-rate sales have left a glut of discounted properties in many markets.
- Prices won't stop falling until they are cleared.
Even though foreclosures and short sales have created a surplus of homes for sale, many of them are undesirable. The supply of homes that people actually want to buy -- and can afford -- is much narrower.
"Some people who want to buy don't have the time, desire or energy to fix up a foreclosure, so they don't buy them," said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors Inc. in Miami,
- where foreclosures or short sales make up two-thirds of homes sold....
The Twin Cities (Minneapolis-St. Paul) have suffered price declines of 11 percent over the past six months.
- That's the worst among cities tracked by the home price index.
Minneapolis enjoys a strong local economy and low unemployment. But it's been beset by foreclosures and skittish home-buyers....
Over the past year, prices for the most affordable homes have fallen 7.5 percent, compared with a 5 percent drop for middle-tier homes and a 2.3 percent decline for the most expensive properties,
- according to data analyzed by Capital Economics."...
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