Home Price Slide Over
The long slide in housing prices is continuing to brake, figures released Tuesday indicate.
For the fourth consecutive month, there was modest improvement in home prices in May, according to Standard & Poor’s Case-Shiller Home Price Index, a closely watched measure of the market.
The index of 20 metropolitan areas had an annual decline of 17.1 percent in May from the same month in 2008, an improvement over April’s 18.1 percent fall. Prices improved in 13 of the 20 cities in the survey, with Cleveland reporting the largest increase, 4.1 percent, followed by Dallas with 1.9 percent and Boston 1.6 percent. Several other cities — Chicago, Denver, Minneapolis, San Francisco and Washington — reported increases of more than 1 percent.
Five cities reported a drop in prices, led by Las Vegas with 2.6 percent.
The 10-city index also noted an improvement in prices, with a 16.8 decline in May compared with the month a year ago, after a 18 percent drop in April.
While the numbers are still grim, the important thing is the direction they are heading, Wells Fargo chief economist John E. Silvia said.
“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” he wrote in a research note.
Before bottoming in January, the Case-Shiller index showed 16 consecutive months of record annual declines. From its peak three years ago, the index is down about a third, pushing prices in major cities back to where they were in 2003.
Noting that 13 of the 20 cities in the index reported positive returns compared with April, David M. Blitzer, index chairman at Standard & Poor’s, said that “these are the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing.”
A housing market where prices are merely flat — never mind one that rises — nevertheless appears a long way off. Many analysts think the most hopeful scenario is that prices start to rise modestly late next year. An economy that double dips into another recession would push that date even further back.
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Sep 18