Home prices continue dropping in February

Home prices continued their retreat in February across most of the nation's top cities as the housing market recovery plods along.

The Standard & Poor's/Case-Shiller home price index showed on Tuesday that prices dropped 0.8 percent, the sixth straight month of declines as prices fell in 16 of the 20 cities in February. 

Prices were up in Phoenix, San Diego and Miami, cities in states with the some of the nation's highest foreclosure rates, while they were unchanged in Dallas.

“While there might be pieces of good news in this report, such as some improvement in many annual rates of return, February 2012 data confirm that, broadly speaking, home prices continued to decline in the early months of the year,” says David M. Blitzer, chairman of the Index Committee at S&P Indices. 

Prices in nine cities — Atlanta; Charlotte, N.C.; Chicago; Cleveland, Ohio; Las Vegas; New York; Portland, Ore.; Seattle; and Tampa, Fla. — as well as the overall index hit new post-crisis lows in February.

Overall, prices in the index have fallen 35 percent since the housing market crashed nearly six years ago. 

As of February, average home prices across the United States are back to the levels where they were in late 2002.

The index shows a year-over-year decline of 3.5 percent, which is better than the 3.9 percent decline posted in January.

Overall, despite the continued price drops, 15 of the 20 cities posted better annual returns in February compared with the prior month. 

But there were yearly declines in 15 of 20 cities in February compared with the same month a year ago, despite the best winter sales in five years. 

Atlanta continued its downward spiral, posting the lowest annual rate of decline for any city in the 20-year history of the index, falling 17.3 percent, five consecutive months of double-digit negative annual rates and seven consecutive monthly declines. 

Besides Atlanta, Chicago and Cleveland also experienced steep monthly drops of 2.5 percent and 1.7 percent, respectively. 

Phoenix, which fared especially bad during the housing crisis, provided some positive news, showing two consecutive months of positive annual rates, the latest being 3.3 percent, along with five consecutive months of increases. 

Still, prices are down 54.2 percent from their peak.

A glut of foreclosures, which are sold at low prices, have held prices down. The housing market needs a combination of factors to improve, including a steadily improving job market, availability of credit and improving consumer confidence. 

Economists have said they expect home prices to bottom out before beginning steady increases this year, bolstering values and spurring more buying.