The Associated Press
NEW YORK — Millions of foreclosures and weak demand from buyers are forcing home prices down in most major U.S. cities.
Prices are falling even in such places as San Francisco and San Diego, which had posted strong increases a few months ago. Analysts say many markets won't improve until they see fewer foreclosures and more job gains.
"Unemployment is still high, people are afraid of losing their homes, and credit is hard to get," said Maureen Maitland, vice president of Standard & Poor's index services.
A report Tuesday underscored the weakness. Home prices declined in 18 of the 20 cities, according to the S&P/Case-Shiller 20-city index. Prices fell 0.7% in September from August, the second-consecutive monthly drop.
The biggest weight on prices going forward is foreclosures, because foreclosed homes sell at steep discounts and reduce nearby property values. About 2 million loans are in foreclosure, and another 2.4 million borrowers have missed at least 90 days of payments, according to LPS Applied Analytics.
Foreclosed properties and other distressed sales are dominating the Tampa market, said Stephanie LeFew, owner of Tampa Home Buy Realty. The number of homes there that received a foreclosure notice rose 7% in the July-September quarter from the previous quarter, according to foreclosure tracker RealtyTrac.
"Buyers are getting discounts of 50% and more," LeFew said.
Prices there hit their lowest point since 2003, dropping 0.8% in September from August, according to the Case-Shiller index. The median price in Tampa was $115,700 in the third quarter, according to Internet real estate service Zillow.
Miami and Phoenix are also being greatly affected by foreclosures. One in every 41 Miami households received a foreclosure filing in the July-September quarter. Home prices there fell 1.2% from August to September.
In Phoenix, the foreclosure rate was one in 44 in the July-September quarter; home prices fell 1.5% from August to September.
Las Vegas has the nation's worst foreclosure rate. One in every 25 households received a foreclosure filing in the July-September quarter.
Still, the city is beginning to show signs of stabilizing. For the second-consecutive month, home prices ticked up 0.1%, according to the Case-Shiller report. Buyers are getting prices that are now more than 50% below their peak from four years ago.
"We're seeing retirees from California and New York, especially, buying homes with cash," said Steve Harless of Realty One Group.
Washington was the only other city to post an increase month over month in the Case-Shiller index. The nation's capital has had fewer foreclosures and one of the best economies.
The outlook for California's cities is mixed. Three California cities in the Case-Shiller index — Los Angeles, San Diego and San Francisco — have seen home prices rebound sharply in the past year.
Yet, prices have softened in the last two months in those cities. Demand has weakened since federal home-buying tax credits expired in the spring. The Case-Shiller index is a moving, three-month average. The September figures are made up of prices in July, August and September, so it would be the first month to show the full impact of the end of the tax credits.
| September housing prices | |||
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| Metro | Sept.-Aug. change | Aug.-July change | 1-year change |
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| Atlanta | -1.0% | -1.0% | -3.1% |
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| Boston | -1.3% | -0.3% | 0.4% |
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| Charlotte | -1.0% | -0.4% | -3.7% |
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| Chicago | -1.5% | 0.4% | -5.6% |
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| Cleveland | -3.0% | -0.3% | -1.9% |
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| Dallas | -1.6% | -1.2% | -2.6% |
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| Denver | -1.0% | -0.1% | -1.6% |
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| Detroit | -1.3% | 0.5% | -3.0% |
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| Las Vegas | 0.1% | 0.1% | -3.5% |
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| Los Angeles | -0.1% | -0.4% | 4.4% |
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| Miami | -1.2% | -0.3% | -2.7% |
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| Minneapolis | -2.1% | -0.4% | -1.2% |
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| New York | -0.3% | 0.1% | -0.1% |
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| Phoenix | -1.5% | -1.3% | -1.9% |
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| Portland | -1.9% | -0.9% | -3.6% |
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| San Diego | -1.0% | -0.6% | 5.0% |
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| San Francisco | -0.9% | -0.3% | 5.5% |
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| Seattle | -0.6% | -0.8% | -2.6% |
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| Tampa | -0.8% | -0.5% | -4.3% |
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| Washington | 0.3% | 0.2% | 4.5% |
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| Composite-10 | -0.5% | -0.1% | 1.6% |
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| Composite-20 | -0.7% | -0.2% | 0.6% |
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| Source: Standard & Poor's and Fiserv Not seasonally adjusted | |||
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