November home prices down across US, including Twin Cities
By Annie Baxter, Minnesota Public Radio and Derek Kravitz, AP Real Estate Writer
St. Paul, Minn. — The annual rate of decline in Twin Cities home prices slowed somewhat in November, according to the a report from Standard & Poor's Case-Shiller home price index released Tuesday.
Prices fell 5 percent compared to November of 2010. That was better than the 6 percent drop seen reported for October.
The Twin Cities' performance bucked a national trend. The annual rate of decline worsened in November for the Case-Shiller 20-city composite index.
The biggest declines were in Atlanta, Chicago and Detroit. Phoenix was the only city to show an increase.
"Nationally, home prices are lower than a year ago," said David Blitzer, chairman of the Index Committee at S&P Indices. "The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand."
The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.
The decline partly reflects the typical fall slowdown after the peak buying season.
Still, prices declined in 18 of the 20 cities in November compared to the same month in 2010. Only Washington and Detroit posted year-over-year increases. And prices have fallen 33 percent nationwide since the housing bust, to 2003 levels.
The Case-Shiller index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The November data are the latest available.
SOME HOPEFUL SIGNS
Home values remain depressed despite some hopeful signs at the end of last year.
Sales of previously occupied homes rose in the last three months. Homebuilders are more optimistic after seeing more people express interest in buying this year. And home construction picked up in the final quarter of last year, which helped housing contribute to broader economic growth.
Home prices tend to follow sales, which are still below healthy levels. And a large number of vacant homes are sitting idle on the market, which means prices will likely stay unchanged for several years, said Paul Dales, senior U.S. economist at Capital Economics.
"The most likely scenario in the U.S. is that in 2012 prices will bob around a bit, with one month's gain being reversed the next month," Dales said. "But in general, over the next couple of years, house prices will do nothing more than remain broadly stable." Dales said prices might not rise consistently until 2015.
Prices are especially low in Cleveland, Detroit, Las Vegas, Phoenix and Tampa, which reached their lowest points since the housing bust more than four years ago.
Washington, New York, Los Angeles and San Diego have suffered the smallest declines.
Economists say home prices are likely begin rising first in hard-hit cities in Arizona, California, Florida and Nevada.
Conditions are also improving for those in position to buy a home. Job growth is up, prices are down, mortgage rates are at record lows and rental prices have risen sharply since the housing bust.
Still, many people can't afford to buy or are unable to qualify for mortgage. Some people in position to buy are holding off, worried that prices could fall even further.
A full housing recovery could take years, economists say.
(Kravitz contributed reporting from Washington.)