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Tue May 31, 2011
Home-price index continues to drop, but Seattle prices rise
Home prices in major markets around the U.S. dropped to their lowest levels since 2006 in March. But not in Seattle.
After falling almost two percent in February, Seattle home prices were up a modest 0.1 percent in March, but still down 7.5 percent compared to March 2010.
Home prices in major areas have reached their lowest level since the housing bubble burst five years ago. They're being pushed down by foreclosures, a glut of unsold homes and the reluctance or inability of many to buy.
Prices fell from February to March in 18 of the metro areas tracked by the Standard & Poor's/Case-Shiller 20-city index. And prices in a dozen markets have reached their lowest points since the housing crisis began. Prices in March rose only in the Seattle and Washington, D.C., metro areas.
Drop Likely to Continue, Say Economists
The nationwide index fell for the eighth straight month. Most economists think prices nationally will drop at least an additional 5 percent by year's end. They aren't likely to stop falling until the glut of foreclosures for sale is reduced, employers start hiring in greater force, banks ease lending rules and would-be buyers regain confidence that a home purchase is a wise investment.
The 12 cities now at their lowest levels in nearly four years are: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Ore., and Tampa.
Coastal areas, such as San Francisco, San Diego, Los Angeles, Washington and Boston, have fared comparatively better in the past two years. They have been aided by healthy local economies and low unemployment, desirable city centers and limited space for new housing.
But the damage is now spreading to areas that had long escaped the worst of the crisis. They include once-thriving markets, such as Dallas, Denver, Minneapolis and Cleveland. Economists regard them as housing bellwethers - metro areas that are reliable indicators of where national prices are headed.
Economics and recovery