WASHINGTON -- Home prices fell in December for a fourth straight month in most major U.S. cities, as modest sales gains in the depressed housing market have yet to lift prices.
The Standard & Poor's/Case-Shiller home-price index shows prices dropped in December from November in 18 of the 20 cities tracked. The steepest declines were in Atlanta, Chicago and Detroit. Miami and Phoenix were the only cities to show an increase.
The declines partly reflect the typical slowdown that comes in the fall and winter.
Still, prices fell in 19 of the 20 cities in December compared to the same month in 2010. Only Detroit posted a year-over-year increase. Prices in Atlanta, Las Vegas, Seattle and Tampa dropped to their lowest points since the housing crisis began.
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Nationwide, prices have fallen 34 percent nationwide since the housing bust, back to 2002 levels. A gauge of quarterly national prices, which covers 70 percent of U.S. homes, fell to its lowest point on records dating back to 1987 after being adjusted for inflation.
"The pick-up in the economy has simply not been strong enough to keep home prices stabilized," said David M. Blitzer, chairman of the S&P's index committee. "If anything, it looks like we might have reentered a period of decline as we begin 2012."
The Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The December data is the latest available.
Home values remain depressed despite some hopeful signs at the end of last year.
Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.
Homes are the most affordable they've been in decades. And mortgage rates have never been cheaper.
Top Five Real Estate Markets to Watch in 2012
Case Shiller: December Home Prices Dropped in Most Cities
Total population (2010): 1,130,490 Median sales price (Q3 2011): $224,300 % ch. median sales price (Q3 2010-Q3 2011): 7.3% Sales volume (# units sold Nov. 2010-Oct. 2011): 12,156 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -39.8% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 93 people Unemployment rate (Nov. 2011): 7.8% Foreclosure activity rate (Nov. 2011): 1 in 1,295 units Walk Score: 40
Despite a steep drop in sales, the Raleigh-Cary market saw considerable price appreciation last year, with its median sales price for single-family homes jumping 7.3 percent from third-quarter 2010 to third-quarter 2011.
At $224,300, the Raleigh-Cary metro had the highest median sales price among the 10 markets on this list and was the only market with a median sales price above the U.S. median. Nonetheless, its affordability rate stayed above the national level, with 73.6 percent of its homes affordable to households earning the area's median income, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
Total population (2010): 623,061 Median sales price (Q3 2011): $120,900 % ch. median sales price (Q3 2010-Q3 2011): 5.5% Sales volume (# units sold Nov. 2010-Oct. 2011): 9,002 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -10.8% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 69 people Unemployment rate (Nov. 2011): 7.1% Foreclosure activity rate (Nov. 2011): 1 in 958 units Walk Score: 41
Like Raleigh-Cary and other markets on this list, home prices in the Wichita metro area weathered the housing downturn comparatively unscathed.
"Inventory has been up and sales have slowed, but values have been relatively unaffected," said Mike Grbic, associate broker and owner of Mike Grbic Real Estate Experts -- Select Homes in Wichita.
The Wichita metro's median sales price rose 5.5 percent from third-quarter 2010 to third-quarter 2011, to $120,900. For 2011 as a whole, the city of Wichita posted one of the top 10 year-over-year median sales price hikes nationwide, up 17.2 percent, according to a chart provided for this report by Onboard Informatics.
Total population (2010): 1,054,323 Median sales price (Q3 2011): $123,400 % ch. median sales price (Q3 2010-Q3 2011): 1.4% Sales volume (# units sold Nov. 2010-Oct. 2011): 11,240 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -18.6% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 94 people Unemployment rate (Nov. 2011): 6.9% Foreclosure activity rate (Nov. 2011): 1 in 4,001 units Walk Score: 63
The Rochester metro area had a 6.9 percent jobless rate in November, compared to an 8.2 percent rate nationwide. The area has seen employment grow 2.8 percent since its fourth-quarter 2009 trough, while employment in the nation as a whole has risen 1.3 percent during that time.
The metro has one of the top 20 fastest job growth rates nationwide, according to Brookings.
Of 100 major metro areas, Rochester is one of only 22 to have regained more than half of the jobs lost between its pre-recession high and post-recession low, the think tank said.
While Rochester has long been associated with the Eastman Kodak Co., the area's economic performance no longer depends on the declining fortunes of that company.
Total population (2010): 569,633 Median sales price (Q3 2011): $157,900 % ch. median sales price (Q3 2010-Q3 2011): 0.8% Sales volume (# units sold Nov. 2010-Oct. 2011): 7,448 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -25.4% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 76 people Unemployment rate (Nov. 2011): 5.3% Foreclosure activity rate (Nov. 2011): 1 in 863 units Walk Score: 48
The Des Moines-West Des Moines metro area had a 5.3 percent unemployment rate in November -- among the lowest rates in the country. Moody's predicts the area will see a further 2 percent jump in jobs from third-quarter 2011 to third-quarter 2012.
"Strong Midwestern values, a highly educated and productive workforce, and the culmination of many years of cooperation between civic, corporate and government make the greater Des Moines area an attractive city to call home (and an) oasis of prosperity," said Brian Wentz, an agent at Burnett Realty in Clive, a suburb of Des Moines.
"That has attracted and retained top employers and led to many years of sustained growth, with no end in sight."
Total population (2010): 528,143 Median sales price (Q3 2011): $128,700 % ch. median sales price (Q3 2010-Q3 2011): 7.3% Sales volume (# units sold Nov. 2010-Oct. 2011): 6,109 % ch. sales volume (Nov. 2010-Oct. 2011 vs. Nov. 2009-Oct. 2010): -18% Sales per population (Nov. 2010-Oct. 2011): 1 sale per 86 people Unemployment rate (Nov. 2011): 7.5% Foreclosure activity rate (Nov. 2011): 1 in 973 units Walk Score: 37
Located between Nashville, Tenn., and Atlanta, the Chattanooga metro area enjoys a low unemployment rate, high affordability, and the highest rate of out-of-state in-migration among the 10 markets.
The area's median sales price rose 7.3 percent in the year through third-quarter 2011, to $128,700. The vast majority of homes in the area, 81.3 percent, were affordable to median-income households during that quarter.
"One of Chattanooga's largest resident communities, (which) historically had enjoyed 3 to 3.7 percent on an average differential between list and sales price ... increased (to a) 4 to 4.9 percent differential from 2010 to 2011," said Linda Brock, an affiliate broker at Prudential RealtyCenter.com in Chattanooga.
Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.
There's hope among some economists that an increase in sales could stop prices from falling further by the late winter or early spring. A rise in prices could lead to a positive cycle of better sales, too.
"Stability in home prices will likely persuade more potential buyers that it is now worth getting into the market," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Conditions are improving for those in position to buy a home. Still, many people can't afford to buy or are unable to qualify for mortgage. Some people in position to buy are holding off, worried that prices could fall even further.
The biggest reason why prices are still falling is foreclosures, which are still high across the country. 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.
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