Home prices fall in most cities
Home prices in most major U.S. cities fell in January, the fifth straight month of home price declines. Prices continued to fall despite modest increases in home sales, according to The Associated Press (AP).
From December to January, prices dropped in 16 of 19 cities tracked, with the steepest declines in San Francisco, Atlanta and Portland, according to the Standard & Poor’s/Case-Shiller home-price index. Miami, Phoenix and Washington posted home price increases in January, the latest data available.
Year-over-year, home prices fell in 17 of 20 cities in January compared to the same month in 2011. Only Denver, Detroit and Phoenix posted year-over-year increases. Nationwide, home prices have fallen 34 percent since the start of the housing crisis.
Home prices in some cities are at decade-low levels. Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa, Fla., recorded prices at 2000 levels or earlier.
The weak housing market persists despite rising home sales. Analysts say continued good sales numbers could eventually boost home prices in 2012, but the gap between sales and prices could lag by about six months.
Home prices are being held down by foreclosures and distressed sales, including short sales when a lender accepts less for a home than what is owed on the mortgage. Foreclosed and distressed sale homes are selling at an average discount of 20 percent, according to AP.
Foreclosures stalled for more than a year over allegations of widespread abuse by banks and mortgage lenders. The logjam opened up in February after all 50 states reached a $25 billion settlement with the nation’s five biggest mortgage lenders.