Housing prices dropped in 19 of 20 cities in November

By Vicki Needham - 01/31/12 11:28 AM ET

Housing prices dropped for the third straight month through November, as prices hover near their all-time lows while the sector struggles to regain its footing.

The index showed declines of 1.3 percent for the 10- and 20-City composites in November, as prices fell in 19 of the 20 cities for the second straight month, according to the Standard & Poor’s/Case-Shiller home-price index released Tuesday.

U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.

“The trend is down, and there are few, if any, signs in the numbers that a turning point is close at hand,” said David Blitzer, chairman of S&P’s index committee.

The housing crisis low for the 10-City index was April 2009 — the index is 1 percent above that level.

The 20-City index hit its low in March 2011 but is only 0.6 percent higher than that.

From their 2006 peaks, prices are down 33 percent through November.

The 10- and 20-City indexes were down 3.6 percent and 3.7 percent, respectively, compared with November 2010.

The biggest monthly declines were in Atlanta (2.5 percent), which posted the lowest annual return of 11.8 percent, Chicago (3.4 percent) and Detroit (2.4 percent). Phoenix, one of the hardest-hit areas in recent years, was the only city to show an increase, and it was a modest 0.6 percent rise in prices.

Still, prices declined in 18 of the 20 cities in November compared to the same month in 2010.

Only Washington (3.8 percent) and Detroit (0.5 percent) posted year-over-year increases, although the cities saw these annual rates fall compared with October’s data.

Prices in Atlanta, Las Vegas, Seattle and Tampa, Fla., all reached new lows in November since the housing crashed.

The market has several factors in place that would, under better economic conditions, bolster the sector. Mortgage rates are low, housing is affordable and job growth has picked up since late summer.

Some housing experts have said that the market has hit rock bottom, but they still expect only gradual improvement in the market before the recovery accelerates in 2013.

Homebuilders have been more optimistic as of late because potential homebuyers have shown a willingness to make purchases — construction picked up toward the end of 2011, while sales of existing homes also improved.

Still, sales continue to stagnate as lending remains constricted and record numbers of foreclosures clog the market. Prices could trend upward again if sales increase from their dismal 2011 levels.

But another round of foreclosures, expected after the federal government, states and the nation’s largest banks reach an agreement on repossession practices, could stymie the market once again.