Home prices down in 20 major cities

04.03.09
By Lewis Green

Consumers in a position to buy a house, with a solid credit score to help qualify for a mortgage loan, may find recent news on home prices promising.

But many others trying to sell their home or who are hopeful it retains value as an investment will be more disappointed by the recent release of new economic data.

According to the Standard & Poor's/Case-Shiller index of home prices, property values in 20 major cities fell by 19 percent when compared to January 2008 - the largest decline recorded since the first index reading in 2000.

"There are very few bright spots that one can see in the data," said David Blitzer, chairman of S&P's index committee. "Most of the nation appears to remain on a downward path."

The home price index was designed to measure the growth in value of residential real estate across the country and give homeowners a quantifiable, monthly benchmark for the national residential real estate market, according to the S&P website.

California has fared particularly poorly since the onset of the recession with higher unemployment than the national average and expectations for a prolonged recession in the state.

A forecast released last week by UCLA Anderson said that California took a harder hit than many other states largely because of a drop in spending and the collapse of a formerly explosive construction industry.

Indication from the home price index suggests there is little relief for some homeowners in the northern part of the state.

Since last January, home prices in San Francisco reportedly fell by 32.4 percent. Some suggest that California cities and other urban areas are unfairly penalized by high foreclosure rates.

An article in the San Francisco Chronicle says that some experts argue the index - which compares values of the same house changing ownership two times - is overstated because foreclosed homes are currently "flooding the market."

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