The modest recovery in home prices is beginning to falter, according to data released Tuesday.þþThe Standard & Poor’s/Case-Shiller home price index, a closely watched measure of 20 metropolitan areas, barely rose in September, increasing 0.3 percent on a seasonally adjusted basis.þþNine of the cities in the index fell in the month, including Boston, Charlotte, New York and Seattle.þþ“This may be a bit of a transition period,” said Maureen Maitland, vice president for index services at Standard & Poor’s.þþAfter literally years of decline, the Case-Shiller index had increased about 3.5 percent from its low in May. In August only a handful of severely troubled cities were continuing to show declines. Some analysts had hoped that the worst was behind the industry.þþThat hope is giving way to pessimism. The housing market traditionally slows during the winter. This year, it will have to confront an abundance of inventory, high unemployment, devastated household balance sheets and an economy that remains wobbly.þþInstead of housing having a slow “V”-shaped recovery, Ms. Maitland speculated, it might instead look more like a “W,” as the price lows plumbed last spring are tested again this winter.þþThe Case-Shiller index covers about 45 percent of the United States housing market. The index is a three-month moving average. Since July and August were relatively strong, the weak September report could indicate a sharp fall-off in prices.þþAlso released Tuesday was the S.& P./Case-Shiller National Home Price Index for the third quarter, which covers about 75 percent of the market. þþThe national index showed an 8.9 percent decline in the third quarter of 2009 versus the third quarter of 2008, a substantial improvement over the 14.7 percent decline in the annual rate of return reported in the second quarter of 2009.þþPrices in Las Vegas have declined for 37 months and are down more than half from their peak. At the other extreme is Dallas, which did not have much of a boom and thus did not have so far to fall. Prices there are only down about 5 percent.þþOver all, the 20-city composite index is off 29.1 percent.The Case-Shiller numbers lag by a month the report on existing home sales, which was issued earlier this week for October. Existing home sales jumped 10.1 percent to the highest level in two years, better than analysts had expected. Much of the increase was attributed to the $8,000 first-time buyer’s tax credit.þþWhile increased sales should push up prices, Ms. Maitland said the overabundance of inventory was acting as a brake. “You can look down the street and have 10 houses to choose from,” she said.þ
Source: NY Times
