October's Home-Price Drop Keeps Housing as a Major Drag
Home prices in the 20-city index also fell 0.8% in October on a year-over-year basis. However, the 10-city index rose 0.2% in October on that basis. October's decline marked the first year-over-year drop for the 20-city index since January.
A Bloomberg survey had expected home prices in the 20-city index to fall 0.7% in October from September, and 0.2% on a year-over-year basis, after falling a revised 0.8% in September from August, and 0.6% year-over-year in September.
"There Is No Good News"
David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said concerned about a double-dip recession in home prices is warranted. "The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October's report. Home prices across the country continue to fall." Blitzer said, in a statement.
"The trends we have seen over the past few months have not changed," he said. "The tax incentives are over, and the national economy remained lackluster in October, the month covered by these data. Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism."
Monthly price drops in October in major U.S. cities were as follows: New York, 1.6%; Chicago, 2%; Boston, 1.2%; Washington, D.C., 0.2%; Atlanta, 2.9%; Tampa, 0.9%; Miami, 1.1%; Dallas, 1.1%; Denver, 0.6%; Los Angeles, 0.7%; San Francisco, 1.9%; and Seattle, 1.3%.
October's home price report is an unqualified negative. As the impact of the homebuyer tax credit waned, home prices have stagnated. The large inventory of unsold homes is likely to continue to place downward pressure on home prices at least through early 2011, and probably for longer. Until both existing- and new-home sales rise in a sustained way to lower those high inventories, home prices will keep struggling.