Home Prices Dip In October
Home prices fell for a second straight month in October, according to the Standard & Poor’s / Case-Shiller index, released earlier this week. The index tracks prices in the nation’s 20 largest cities, of which 19 showed a decline on a month to month basis. Overall the index slipped 1.2 percent from September’s prices, and are down 3.4 percent compared to October 2010. Of course, a decline in home prices is typical this time of the year, as home buyers tend to be the most active during the summer, and sales historically tail off toward the end of the year.
Of the cities tracked by the S&P index, Atlanta is suffering through the worst decline in values, as prices fell 5 percent in October after falling 5.9 percent in September, and are now down 11.7 percent on a year-to-year basis. Atlanta, Cleveland, Detroit and Las Vegas, meanwhile all have average prices lower than those seen at the beginning of 2000. US home values appeared to have stabilized during the summer, but analysts note that the brief respite from falling prices was merely a result of banks slowing down the foreclosure process.
The housing market still has to contend with a massive shadow inventory of distressed properties, the bulk of which must go through the system before any real recovery can take place in the housing market. At the end of the third quarter, there were still 6 million homeowners, or 12.6 percent of those with an outstanding mortgage, that were either seriously behind on their monthly payments or already in some stage of the foreclosure process. Furthermore, more than a fifth of the nation’s homes with mortgages were underwater, meaning their owners owed more on the loan than the home was worth.