US Housing Prices Fell Again in December

Home real estate prices slid again in December, pushing a leading price index

within a whisper of its lowest level since the housing crash began, data released Tuesday showed.

Standard & Poor’s/Case-Shiller Home Price Index of 20 large metropolitan areas fell 1 percent in December from November,

although the drop shrank to 0.4 percent when the data was adjusted for seasonal variations.

The only city in the index that posted a monthly gain on an unadjusted basis was Washington.

Home real estate prices slid again in December, pushing a leading price index

within a whisper of its lowest level since the housing crash began, data released Tuesday showed.

Standard & Poor’s/Case-Shiller Home Price Index of 20 large metropolitan areas fell 1 percent in December from November,

although the drop shrank to 0.4 percent when the data was adjusted for seasonal variations.

The only city in the index that posted a monthly gain on an unadjusted basis was Washington.

Robert Shiller and Karl Case, the economists who developed the index, said in a conference call that

they held different opinions about where the market was headed.

Mr. Case said he thought the housing market was at “a rocky bottom with a down trend.”

That made him the optimistic one.

Mr. Shiller, noting

• the unrest in the Middle East,
• a large backlog of foreclosed houses,
• the uncertain future of the mortgage holding companies Fannie Mae and Freddie Mac and
• proposals to reduce the mortgage tax deduction,

saw “a substantial risk” of declines of “15 percent, 20 percent, 25 percent.”

The 20-city composite is currently off 31.2 percent from its peak.

Many economists expect the market to fall another 5 to 10 percent in the next few months.

One data point that favored Mr. Case’s relative optimism was that

the adjusted declines in December and November were about half the drops in the previous two months,

indicating the slide might be slowing.

Still, the combined plunge is taking a toll.

Eleven cities in the index posted their lowest levels in December since home prices peaked in 2006 and 2007,

up from nine cities in November.

Phoenix and New York joined a list that includes Atlanta, Chicago and Seattle.

Also released Tuesday was the Case-Shiller quarterly index that covers all homes in the country.

It showed prices fell 3.9 percent in the fourth quarter and 4.1 percent for all of 2010.

The Case-Shiller index is a three-month moving average.

It is now less than 3 percent above the low recorded in the spring of 2009,

when there was widespread hope that the market was starting to recovery.

To accelerate the process, the Obama administration offered a carrot for new buyers: a tax credit.

The credit did its job, causing hundreds of thousands of buyers to accelerate their purchases in the fall of 2009 and the spring of 2010.

But the credit did not lay the groundwork for a permanent rebound.

Andrew LePage, an analyst with DataQuick Information Systems said in the New York Times,

“Every place is pretty much getting hit a second time for essentially the same reasons:

• slow economic recovery,
• little job growth,
• still-tight credit,
• no more government stimulus,
• a pervasive and gnawing sense that prices could fall more,
• too few people getting jobs and
• too many worrying about losing the one they have.”