Home prices keep falling in Seattle, October index shows

Any momentum that the beleaguered Seattle housing market might have built up over the summer seems to have evaporated, according to a closely watched index of home prices.

The Standard & Poor’s/Case-Shiller index, released Tuesday, showed that prices in Seattle slipped an additional 1 percent in October from September, bringing the local index back down to where it was this spring.

The October decline was the third in a row for the Seattle index, which has dropped 6.2 percent from October 2010 to October 2011 and now stands close to its low point for the current slump.

But Seattle wasn’t alone: Home prices fell in October in 19 of the 20 major cities tracked by the Case-Shiller index. And the October decline locally was a bit less than the 1.2 percent average drop.

In part, the October declines reflected the typical fall slowdown after the peak buying season in summer. Prices in most cities declined for the second straight month; before that, they had risen for five consecutive months in at least half of the cities tracked.

The Case-Shiller index covers half of all U.S. homes. It measures prices relative to those in January 2000 and creates a three-month moving average. The monthly data are not seasonally adjusted.

Atlanta, Detroit and Minneapolis posted the biggest monthly declines in October. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began. Prices rose in Phoenix after three straight monthly declines.

David M. Blitzer, chairman of S&P’s index committee, said steep price drops in cities such as Atlanta, Chicago, Cleveland, Detroit and Minneapolis were particularly worrisome because their gains earlier this season were so strong.

“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” Blitzer said. “These markets were some of the strongest during the spring/summer buying season.”

Seattle’s monthly decline was in the middle of the pack, but it’s year-over-year decline was the fourth-biggest among the 20 cities covered by the Case-Shiller index.

Americans are reluctant to purchase a home more than two years after the recession officially ended. High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history haven’t been enough to lift sales.

Some people can’t qualify for loans or meet higher down-payment requirements. Many with good credit and stable jobs are holding off because they fear that prices will keep falling.

Sales of previously occupied homes are barely ahead of 2008’s dismal figures — the worst in 13 years. And sales of new homes this year will likely be the worst since the government began keeping records a half century ago.

Prices are also certain to fall further once banks resume millions of foreclosures. They have been delayed because of a yearlong government investigation into mortgage-lending practices.

Home prices had stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.

Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — are selling at an average discount of 20 percent.

The author of this article is: seattletimes.nwsource.com

 See the original post at: http://seattletimes.nwsource.com/html/businesstechnology/2017102535_homeprices28.html

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