Home-price drops vary by locale

NEW YORK (AP) — National home prices are at levels not seen since the 2002 Winter Olympics, but a closer look at a housing index released Tuesday shows real estate is indeed local with some prices in certain cities falling to pre-2000 values.

The Standard & Poor’s/Case-Shiller National Home Price index reported home prices tumbled by 19.1 percent in the first quarter, the most in its 21-year history. Home prices have fallen 32.2 percent since peaking in the second quarter of 2006.

But in cities across the country home prices varied dramatically, depending on affordability, foreclosure activity and the local economy. The bottom may be in sight in some markets, but nationally home values are expected to decline — though at a slower pace — for the rest of the year.

“By our estimation, the composite 20-city index is perhaps two-thirds of the way through its ultimate total decline in this cycle,” according to Joshua Shapiro, chief U.S. economist for MFR Inc.

It’s hard to believe it could get much worse for homeowners in Detroit. Homes there are worth what they sold for in 1995. And though that’s good news for home buyers, the implosion of the auto industry and economic fallout means fewer buyers have the money to qualify for a mortgage.

“I feel like houses here are free,” said Detroit area real estate agent Rose Marie Jouan with Re/Max Showcase Homes. A house she sold in 2004 for $200,000 is on the sales block, bank-owned, for $86,000.

The Case-Shiller report offered hopeful signs the worst may be over for some cities. Denver prices posted an increase over February, and Dallas prices were flat.

Also, the rates of annual decline for the 10- and 20-city indexes slowed in March, the second straight month they didn’t set record price drops.

All 20 cities showed monthly and annual price declines, with nine setting annual records. Fifteen cities posted double-digit drops, and Phoenix, Las Vegas and San Francisco recorded declines of more than 30 percent.

Minneapolis posted a 6.1 percent decline from February to March, the biggest monthly drop on record for any metros in the indexes. Ron Peltier, chairman and chief executive of HomeServices of America, attributed the drop to a jump in distressed sales in March.

Economists will get a look at April housing data today when the National Association of Realtors releases sales data for previously owned homes, and on Thursday when the Commerce Department puts out numbers for sales of newly built homes.

Economists surveyed by Thomson Reuters expect existing-home sales to rise 2 percent from March to April, and new-home sales are forecast to rise by 1.1 percent.