Home prices fell across U.S. in February

Year over year, U.S. home prices posted a 1.4 percent rise, their first increase since December 2006.
Year over year, U.S. home prices posted a 1.4 percent rise, their first increase since December 2006. (Nati Harnik/associated Press)
By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, April 28, 2010

A closely watched housing-market index released Tuesday showed that home prices dropped in many major metropolitan areas from January to February, though prices are up from the same time a year ago.

The Standard & Poor's/Case-Shiller index showed that prices of single-family homes slid 0.9 percent in February from January. The index -- long considered a reliable gauge of the housing market's health -- showed that prices were down in almost all of the 20 regions it tracks. The sole exception was San Diego, where prices rose 0.6 percent. In the Washington region, prices slid 0.5 percent.

"It is too early to say that the housing market is recovering," David Blitzer, the index committee's chairman, said in a statement.

In six cities -- Charlotte, Las Vegas, New York, Seattle, Tampa and Portland, Ore. -- prices were at their lowest level since they peaked three or four years ago, Blitzer said.

When adjusted for seasonal factors, the index was down only 0.1 percent in February from the previous month. Las Vegas, Los Angeles, San Diego and San Francisco posted small gains. Seasonally adjusted prices were flat in the Washington region.

Because home-buying activity generally declines in the winter, economists who track the industry have traditionally relied on seasonally adjusted data, which correct for the slowdown, to measure the underlying trends.

But Case-Shiller officials recommend looking at the primary numbers, arguing that the seasonally adjusted data are more likely to be skewed by a high volume of foreclosures in some markets. Foreclosures do not have a seasonal pattern and the seasonal-adjustment process makes the market look stronger than it is, said Maureen Maitland, vice president of the index.

By either measure, the price trend does not look stellar, said Patrick Newport, an economist at IHS Global Insight. "Prices are not taking off as they appeared to have been a couple of months ago," he said.

The February results look better when compared with last year's period. For the first time since December 2006, the year-over-year rate of change was positive, up 1.4 percent. However, even those numbers show year-over-year declines in 11 of 20 cities.

The housing market's collapse crippled the economy, and the sector's rebound is considered critical to getting economic activity back on track. Many economists predict that home prices still have further to fall.

The Case-Shiller index measures repeat sales of homes and reflects a rolling three-month average, so that the February data captured transactions that closed in December and January as well.

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