Home prices sunk in metro areas across the country during the fourth quarter of 2010, according to numbers released today in the S&P/Chase-Shiller Home Price Indices. Foreclosures, weak demand, the expiration of the housing tax credit, and the cold season combined for a perfect storm that caused the national home price index, which tracks major metro area prices, to decline 3.9% in the quarter and 4.1% year-over-year, landing it within a percentage point of the record low it set during the first quarter of 2009.
Both the 10- and 20-city indices fell on a monthly and yearly basis. With the 10-city down 0.9% from November and 1.2% year-over-year, and the 20-city 1.0% lower than the previous month and 2.4% lower than the previous year, the numbers confirmed that in metro areas, the double-dip in home prices that many builders have been fearing has become a reality.
Declines were widespread with 19 of the 20 major metro areas tracked reporting decreases in December from November’s numbers. Washington, D.C., marked the only increase—a slight 0.3% gain.
Year-over-year, only two markets—San Diego and Washington, D.C.—saw gains. Eleven markets, including Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland, Ore., Seattle, and Tampa, Fla., hit their lowest levels since the bubble burst.
“Unlike the 2006 to 2009 period when all cities saw prices move together, we see some differing stories around the country,” said David Blitzer, chairman of Standard & Poor’s Index Committee. “California is doing better with gains from their low points in Los Angeles, San Diego, and San Francisco. At the other end is the Sun Belt—Las Vegas, Miami, Phoenix, and Tampa. All four made new lows in December. Also seeing renewed weakness are some cities that were among the last to reach their peaks including Atlanta, Charlotte, Portland, and Seattle, where new lows were also seen.”
Patrick Newport, U.S. economist at IHS Global Insight, saw hope in that most cities appear to be reaching a bottom. “In a few cities, such as San Francisco, Washington, D.C., and San Diego where prices have risen 15%, 12%, and 10% respectively, since hitting a cyclical low, prices are recovering,” he pointed out in a press release today.
Newport anticipates that prices will continue to decline another 5% before beginning to recover around the middle of this year.
Claire Easley is senior editor, online, at Builder.
Learn more about markets featured in this article: Atlanta, GA, Charlotte, NC, Chicago, IL, Detroit, MI, Las Vegas, NV, Miami, FL, New York, NY, Phoenix, AZ, Portland, OR, Seattle, WA, Tampa, FL, Washington, DC, San Diego, CA, San Francisco, CA, Los Angeles, CA, Greenville, SC.