Home prices decline in many places

Prices of single-family homes declined in April from March in many areas, but the pace of the decline slowed, suggesting stability is emerging, according to the latest Standard & Poor's/Case Shiller home price indexes.

An index of 20 metropolitan areas dipped 0.6% in April from March, after a 2.2% decline the month before, for an 18.1% downturn from a year earlier.

The month's slide was smaller than the 1.8% drop forecast in a Reuters poll.

S&P's index of 10 metropolitan areas declined 0.7% in April for an 18% year-over-year drop, after falling 2.1% month on month in March.

The rate of annual decline in these measures has improved, from 18.7% for both indexes in March.

"While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions," David Blitzer, chairman of the index committee at S&P, said in a statement. "We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here."

Blitzer said that the stock market has risen from March and consumer confidence gauges have turned higher, fostering improved sentiment in housing.

Thirteen of the 20 metro areas showed improvement in the annual returns in April compared with March, and every metro area except for Charlotte, North Carolina had a better monthly return, S&P said.

"This is positive news for people who don't live in those speculative markets," said John Silvia, chief economist at Wachovia Securities in Charlotte. "Housing is going to be less of a drag on the economy but it won't be adding to it as it traditionally does."

Average home prices have wiped out six years of gains, returning to levels seen in mid-2003, S&P said.

The 20-year composite index has toppled 32.6% and the 10-city composite index has tumbled 33.6% from peaks in the second quarter of 2006.

Phoenix, Las Vegas and San Francisco were the three worst performing metro areas, with declines as big as 35.3% in Phoenix. Denver, Dallas and Boston fared the best, with single-digit declines.

With the exception of Dallas, all 20 metro areas have posted double-digit price declines from their peaks. Ten of the areas have fallen more than 30% and two — Phoenix and Las Vegas — by more than 50%.

"In housing, the worst is behind us, but it is an awfully deep hole we will have to climb our way out of," said Kevin Flanagan, fixed income strategist, global wealth management, at Morgan Stanley in Purchase, New York.

Metro area
April 2009 index
Change from March
Change from April 2008

Atlanta
105.36
0.3%
-14.8%

Boston
146.45
0.4%
-7.7%

Charlotte
118.69
-0.5%
-10.0%

Chicago
122.3
0.0%
-18.7%

Cleveland
98.07
1.2%
-10.5%

Dallas
114.39
1.7%
-5.0%

Denver
122.17
1.5%
-4.9%

Detroit
69.92
-1.5%
-25.4%

Las Vegas
112.39
-3.5%
-32.2%

Los Angeles
159.37
-0.9%
-21.3%

Miami
145.77
-2.0%
-27.3%

Minneapolis
108.63
-0.7%
-22.1%

New York
170.33
-1.7%
-12.5%

Phoenix
104.45
-2.2%
-35.3%

Portland
146.85
-0.6%
-16.0%

San Diego
144.43
-0.1%
-20.0%

San Francisco
118.46
0.6%
-28.0%

Seattle
149.38
0.2%
-16.8%

Tampa
140.41
-0.7%
-21.3%

Washington
167.3
0.8%
-16.9%

Composite-10
150.34
-0.7%
-18.0%

Composite-20
139.18
-0.6%
-18.1%

Source: S&P/ Case-Shiller

The indexes have a base value of 100 in January 2000. A current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located in that market.

(prepared by Lynn Adler/USA Today)