Residential real estate prices in the U.S. decreased in the year ended in June at a slower pace than in the prior month, a sign the market may be stabilizing.
The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after a 4.6 percent drop in the 12 months ended May that was the biggest since 2009, the group said today in New York. The median forecast of 31 economists surveyed by Bloomberg News projected a 4.6 percent decline.
Values fell by 0.1 percent in June from the prior month after adjusted for seasonal changes, matching the decrease in May, indicating the deterioration is slowing. Nonetheless, any recovery in home values is probably years away as foreclosures dump more properties onto to the market, while a jobless rate hovering around 9 percent and strict lending rules hurt sales.
“Prices aren’t going to rebound back rapidly,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “Most people think that when the downturn ends the recovery will be pretty good, but that’s not going to be the case at all.”
From the NY Times:
Spring buying pushed home prices up for a third consecutive month in most major American cities in June, a private report showed. But the housing market remained shaky, and further price declines were expected this year.
The Standard & Poor’s/Case-Shiller home price index said prices increased in June from May 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 last 12 months, home prices have declined in all 20 cities.
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 increases.
Analysts say home prices have stabilized in coastal cities over the last six months. Seasonally adjusted prices have fallen a modest 1 percent in the last six months, according to the index. That is less than a third of the decline from the previous six months.
Home prices are certain to fall further once banks resume foreclosures, millions of which have been delayed because of a government investigation into mortgage lending practices. If the American economy slips back into another recession, prices could drop even further.