Case Shiller: Home Prices Up for a Change

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Case Shiller

WASHINGTON -- Spring buying pushed home prices up for a third straight month in most major U.S. cities in June. But the housing market remains shaky, and further price declines are expected this year.

The Standard & Poor's/Case-Shiller home-price index showed Tuesday that prices increased from May to June in 19 of the 20 cities tracked. Prices rose 3.6 percent in the April-June quarter from the previous quarter. Neither of those numbers is adjusted for seasonal factors.

Over the past 12 months, home prices have declined in all 20 cities.
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Case-Shiller Home Price Index: Top 20 Markets
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Case Shiller: Home Prices Up for a Change

July 2011: 104.55
June/July Change: .2%
June/May Change: 1.5%
1-Year Change: -5.0%

See homes for sale in Atlanta, GA

July 2011: 155.76
July/June Change: 0.8%
June/May Change: 2.4%
1-Year Change: -1.9%

See homes for sale in Boston, MA

July 2011: 112.47
July/June Change: 0.1%
June/May Change: 1.9%
1-Year Change: -3.9%

See homes for sale in Charlotte, NC

July 2011: 117.78
July/June Change: 1.9%
June/May Change: 3.2%
1-Year Change: -6.6%

See homes for sale in Chicago, IL

July 2011: 101.53
July/June Change: 0.8%
June/May Change: 1.5%
1-Year Change: -5.4%

See homes for sale in Cleveland, OH

July 2011: 116.96
July/June Change: 0.9%
June/May Change: 1.4%
1-Year Change: -5.0%

See homes for sale in Dallas, TX

July 2011: 125.97
July/June Change: 0.0%
June/May Change: 1.6%
1-Year Change: -2.1%

See homes for sale in Denver, CO

July 2011: 72.04
July/June Change: 3.8%
June/May Change: 5.8%
1-Year Change: 1.2%

See homes for sale in Detroit, MI

July 2011: 95.48
July/June Change: -0.2%
June/May Change: 0.1%
1-Year Change: -5.4%

See homes for sale in Las Vegas, NV

July 2011: 170.05
July/June Change: 0.2%
June/May Change: 0.3%
1-Year Change: -3.5%

See homes for sale in Los Angeles, CA

July 2011: 141.15
July/June Change: 1.2%
June/May Change: 0.6%
1-Year Change: -4.6%

See homes for sale in Miami, FL

July 2011: 115.25
July/June Change: 2.6%
June/May Change: 3.5%
1-Year Change: -9.1%

See homes for sale in Minneapolis, MN

July 2011: 168.51
July/June Change: 1.1%
June/May Change: 0.9%
1-Year Change: -3.7%

See homes for sale in New York, NY

July 2011: 100.54
July/June Change: -0.1%
June/May Change: 0.3%
1-Year Change: -8.8%

See homes for sale in Phoenix, AZ

July 2011: 135.80
July/June Change: 1.0%
June/May Change: 0.0%
1-Year Change: -8.4%

See homes for sale in Portland, OR

July 2011: 155.22
July/June Change: 0.1%
June/May Change: 0.2%
1-Year Change: -5.9%

See homes for sale in San Diego, CA

July 2011: 135.28
June/July Change: 0.3%
June/May Change: 0.4%
1-Year Change: -5.6%

See homes for sale in San Francisco, CA

July 2011: 137.57
July/June Change: 0.1%
June/May Change: 0.7%
1-Year Change: -6.4%

See homes for sale in Seattle, WA

July 2011: 129.61
July/June Change: 0.8%
June/May Change: 1.2%
1-Year Change: -6.2%

See homes for sale in Tampa, FL

July 2011: 187.79
June/July Change: 2.4%
June/May Change: 2.2%
1-Year Change: 0.3%

See homes for sale in Washington, DC

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Chicago, Minneapolis, Washington and Boston posted the biggest monthly increases. Metro areas hit hardest by the housing crisis, including Las Vegas and Phoenix, reported small seasonal increases.

Housing has been a drag on the economy and is a key reason it has struggled to recover two years after the recession officially ended. Home sales are on pace this year to be the worst in 14 years.

High unemployment, larger down payment requirements and tighter credit are preventing many buyers from entering the market. Many who can afford to buy are waiting because they are worried prices have yet to hit bottom.

Where prices have stabilized

Analysts say home prices have stabilized in coastal cities over the past six months. Seasonally adjusted prices have fallen a modest 1 percent over the past six months, according to the index. That's less than a third of the decline from the previous six months.

But this year, home prices in many cities have reached their lowest points since the housing market went bust more than four years ago. Prices in Cleveland, Detroit, Las Vegas, Phoenix and Tampa are at 2000 levels.

"These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together," said David M. Blitzer, chairman of the S&P's index committee.

The index measures prices compared with those in January 2000 and creates a three-month moving average. The June data is the latest available.

Home prices are certain to fall further once banks resume millions of foreclosures, which have been delayed because of a government investigation into mortgage lending practices. If the U.S. economy slips back into another recession, prices could drop even further.

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States Where No One Wants to Buy a New Home
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Case Shiller: Home Prices Up for a Change

10. Pennsylvania

> Building permits/total housing units: 0.15%
> Decline in building permits 2005-2011: -60.29% (11th smallest)
> Building permits 2011 YTD: 8,136
> Total housing units: 5,567,315


At the beginning of 2011, a number of new, restrictive building codes went into effect in Pennsylvania. This caused a rush among builders to secure permits, with housing permits increasing a massive 117.8% between November and December 2010, according to the Philadelphia Federal Reserve. The state’s housing market has not been doing well since. Permits issued from January to June 2011 fell 16% compared to the same six-month period one year earlier. The national average for permits issued in the first six months of 2011 compared to the first six months of 2011 is a decrease of 6%.

9. Maine

> Building permits/total housing units: 0.14%
> Decline in building permits 2005-2011: -77.09% (11th largest)
> Building permits 2011 YTD: 1,000
> Total housing units: 721,830


Maine has seen one of the largest decreases in building permits in the past six years. This is unsurprising as home sales in general declined substantially. Home sales for June 2011 decreased 21.39% from June 2010, according to the Maine Association of Realtors. The state’s median sales price also decreased 1.37% over this same period. According to numbers from the Census Bureau, Maine has the highest vacancy rate in the country, reaching 22.8% in 2010. However, this number also includes empty vacation houses.

8. New York

> Building permits/total housing units: 0.14%
> Decline in building permits 2005-2011: -61.85% (12th smallest)
> Building permits 2011 YTD: 11,033
> Total housing units: 8,108,103


New York State’s housing market is among the largest in the country. As a result, the number of permits is minuscule when compared to the state’s total housing units. Although new home sales decreased in the first half of 2011 from 2010, the number of permits actually increased slightly during that period, from 10,189 in 2010. This is significantly lower than 2005’s 28,921 permits.

7. Massachusetts

> Building permits/total housing units: 0.12%
> Decline in building permits 2005-2011: 69.55% (24th smallest)
> Building permits 2011 YTD: 3,402
> Total housing units: 2,808,254

Despite having a healthy economy compared to much of the country, Massachusetts’ housing market is beginning to face serious troubles. In June 2011, sales of single-family homes in the state decreased 23.5% from the year before, reaching the lowest level since 1991, according to the Warren Group, a New England real estate research firm. With so few home sales, it follows that not many new homes are being built. Year-to-date, building permits for 2011 are about one quarter of what they were in 2005.

Photo: Cliff1066tm, flickr

6. Ohio

> Building permits/total housing units: 0.12%
> Decline in building permits 2005-2011: -76.61% (12th largest)
> Building permits 2011 YTD: 6,184
> Total housing units: 5,127,508


Ohio has suffered, and continues to suffer, greatly from the housing crisis. Over 8,000 homes were foreclosed in July 2011, the ninth-largest amount in the country, according to real estate company RealtyTrac. With such a high foreclosure rate, currently at one in every 608 housing units, housing is already too inexpensive for people to want to build. Ohio has therefore had one of the greatest decreases in building permits in the country over the past six years. Median existing home sales are also down in many areas of the state, according to data from the National Association of Realtors. In Toledo, prices are down 17% from one year ago, the third largest rate in the country.

5. Connecticut

> Building permits/total housing units: 0.09%
> Decline in building permits 2005-2011: -74.06% (14th largest)
> Building permits 2011 YTD: 1,403
> Total housing units: 1,487,891


Connecticut has had one of the greatest declines in the number of new building permits in the country. This trend saw a small turnaround in June — the first monthly year-over-year gain in 2011 in new construction, according to the Connecticut Department of Economic and Community Development. However, the Hartford Courant reports that for “the first six months of the year, residential construction was down 30 percent compared with the same period in 2010.” June was also the first increase in home construction in five years.

4. Michigan

> Building permits/total housing units: 0.09
> Decline in building permits 2005-2011: -82.19% (7th largest)
> Building permits 2011 YTD: 4,250
> Total housing units: 4,532,233


Michigan is one of the states that has suffered the most from the recession. The state’s unemployment rate peaked around 15% in 2010. It is now at 10.5%, which is still significantly  higher than the national average of 9.2%. The state has a vacancy rate of just under 15%, which is one of the highest in the country. New building permits have also decreased by over 80% since 2005, also one of the highest rates in the country. The state may now be more focused on tearing down old buildings than building new ones.

3. Illinois

> Building permits/total housing units: 0.09%
> Decline in building permits 2005-2011: -84.18% (3rd largest)
> Building permits 2011 YTD: 4,897
> Total housing units: 5,296,715


Illinois has seen an almost 85% decrease in new housing permits since 2005. This is the third largest drop in the country. There are a number of initiatives being made across the state to improve the housing markets. In Chicago, for instance, Mayor Emanuel has made a number of changes to increase the speed with which building permits are issued. Additionally, a “Micro-Market Recovery Program” has been introduced to slow the city’s foreclosure rate.

2. West Virginia

> Building permits/total housing units: 0.09%
> Decline in building permits 2005-2011: -72.71% (17th largest)
> Building permits 2011 YTD: 774
> Total housing units: 881,917

West Virginia’s decline in building permits has slowed to almost a crawl. In the first six months of 2005 the state issued almost 3,000 permits. For the first half of 2011, that amount decreased to 774. If every permit were to result in a new housing structure, those homes would represent less than 0.1% of the total housing units in the state. Despite all this, construction is one area that is benefiting the state. According to the organization WorkForce West Virginia, 700 construction jobs were added in-state this past July — the largest amount of jobs added in the private sector.

1. Rhode Island

> Building permits/total housing units: 0.07%
> Decline in building permits 2005-2011: -70.81% (22nd largest)
> Building permits 2011 YTD: 312
> Total housing units: 463,388


Foreclosure filings increased 4% in Rhode Island from the first six months of 2010 to the first six months of 2011, according to RealtyTrac. Foreclosures dropped by 29% for that same period on the national level. Rhode Island home sales decreased 20% from one year ago in the second-quarter, according to the Rhode Island Association of Realtors. Additionally, median home prices have dropped 2%. These numbers indicate that Rhode Island’s housing market is not recovering at the same pace as the majority of the country. For this first six months of this year, the state has issued a mere 312 building permits, the smallest number in the country.

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"There's no theoretical floor for prices. If the economy worsens, housing will get into a vicious cycle of falling prices and foreclosures," said Mark Zandi, chief economist at Moody's Analytics. "When prices fall, confidence wanes."

Last year, a homebuyer tax credit helped boost prices temporarily. But prices began to fall shortly after the tax credit expired. They tumbled in big metro areas in March to their lowest level since 2002.

The pace of sales

As prices have declined, so too have sales.

The pace of sales for previously occupied homes is trailing last year's 4.91 million sold, the fewest since 1997. In a healthy economy, people buy roughly 6 million homes each year.

Sales of new homes dropped in July for third straight month. This year is shaping up to be the worst for sales of new homes on records dating back to 1963.

Foreclosures and short sales -- when a lender agrees to sell for less than what is owed on a mortgage -- made up about 30 percent of all home sales last month, up from about 10 percent in past years. And 1.7 million potential foreclosures are being held up, according to real estate firm CoreLogic, either by backlogged courts or lenders awaiting state and federal probes into troubled foreclosure practices.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

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