Home prices fall 2.2 percent in Chicago area in February
BY FRANCINE KNOWLES Business Reporterfirstname.lastname@example.org
Home prices in the Chicago metropolitan area fell 2.2 percent in February from January and set a new post-peak low for the third straight month, according to the latest Standard & Poor’s, Case-Shiller home price index.
Prices fell 7.6 percent from a year ago, worse than the year-over-year decline in February 2010, when prices fell 3 percent.
Nationally, the 10-city composite was down 1.1 percent since January and 2.6 percent from a year earlier. The 20-city composite fell 1.1 percent from January and 3.3 percent from February 2010. Ten of 11 metropolitan areas that had record post-peak lows in January fell further in February.
“There is very little, if any, good news about housing,” David Blitzer, chairman of the Index Committee at S&P said in a statement. “Prices continue to weaken, trends in sales and construction are disappointing.”
Fourteen metropolitan areas and both composites have continued to decline month-over-month for more than six straight months, he noted, adding, “The 20-city composite is within a hair’s breadth of a double dip” decline.
The Detroit metropolitan area was the only area with a positive monthly change, with prices edging up 1 percent from January, but down 3.7 percent from February 2010. The Washington, D.C. area was the only one to show a year-over-year increase, with a 2.7 percent rise.
Prices are at their lowest point since 2006 or 2007, at the height of the housing boom in the Chicago, Atlanta, Charlotte, Las Vegas, Miami, New York, Phoenix, Portland, Ore., Seattle and Tampa areas. Prices in the Atlanta, Cleveland, Detroit and Las Vegas areas are below 2000 levels.
The housing sector is struggling even while much of the economy is recovering slowly but steadily. Some of the worst declines in home prices are in cities hit hardest by unemployment and foreclosures.
In many depressed markets, a significant percentage of buyers are really investors and private equity firms looking to cash in on cheap real estate.
Foreclosures are expected to rise to 1.2 million this year as many banks revisit thousands of foreclosure cases, spurred into action by federal regulators who have ordered top-to-bottom reviews of how foreclosures were carried out over the past two years.
“It’s hard to sell when buyers have the leverage and foreclosures continue to create a gap between distressed sale prices and non-distressed sale prices,” said Jonathan Basile, an economist at Credit Suisse Securities.
More than 90 percent of homeowners say it’s a bad time to sell their home, according to the Reuters/University of Michigan Survey of Consumers.
The Case-Shiller index measures sales of select homes in those cities compared to January 2000. For each of the 20 metropolitan areas it studies, the index provides an updated three-month moving average price. By measuring the sales price of the same homes over time, the index attempts to gauge true market values.