U.S. home prices in January fell for the sixth month in a row, according to the S&P/Case-Shiller home price index released on Tuesday. The index, which covers 20 major markets, fell 3.1 percent year-over-year, edging it closer to the reality of a home-price double dip.
90 Percent of the Market Experienced Price Declines
According to the S&P index, 18 of the 20 markets covered by the survey experienced year-over-year price declines. Among the worst declines were:
- Phoenix: 9.1 percent
- Detroit: 8.1 percent
- Portland: 7.8 percent
- Minneapolis: 7.6 percent
- Chicago: 7.5 percent
The only two markets to experience increases over the same period were Washington, D.C. and San Diego, which saw year-over-year increases of 3.6 percent and 0.1 percent, respectively.
Prices Nearing Market Bottom
With the index dropping significantly for the sixth straight month, experts are saying that prices are nearing the market’s bottom, which was set in April 2009. Prices are at least expected to decline for several more months, and could, in fact, drop another 5-10 percent, increasing the odds that the market will experience a double dip very soon.
It doesn’t help that existing home sales dropped 9.6 percent and new home sales fell 16.9 percent in February, reaching a record low. The dismal reports are clear indicators that the housing market is still in trouble. And with the expectation of more foreclosures this year, the possibility of a recovery is becoming faint.
David M. Blitzer, a spokesman for S&P confirmed fears that the housing market is in trouble when interviewed by CNN Money. But he took the bad news one step further by stating, “The feared double-dip recession may be materializing.”
The home loan scandals of last year that resulted in a foreclosure crisis are not aiding the already troubled market. Because of this and the market’s many issues, many fear that we will only be able to sit back and watch as the economy suffers from the market’s demise, taking another devastating tumble.