January report of sharp decline "brings us weakening home prices with no real hope in sight for the near future."
A home for sale is posted at a reduced price in Palo Alto, Calif., Thursday, June 24, 2010. Mortgage rates fell this week to the lowest level on record, giving consumers added incentive to lock in low payments for home purchases and refinanced loans.
A closely watched home-price index for the Twin Cities area fell 3.4 percent from December to January, the biggest decline of the 20 metropolitan areas in the survey.
It was a tough month for the major metro areas surveyed. The home price index was down 1 percent from December to January and 3.1 percent compared to January 2010, according to the Standard & Poor's/Case-Shiller survey.
The January report raises doubts about the prospects of a sustained housing recovery, said David Blitzer, chairman of the Index Committee at Standard & Poor's. The 20-city composite has shown monthly declines for six straight months.
"Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future," Blitzer said.
Prices were down even more significantly when compared to January last year. The Twin Cities metro area, for example, saw prices fall 7.6 percent, behind only Phoenix, Detroit and Portland, Ore. The Washington, D.C., area seems to be weathering the turmoil the best with a slight increase between December and January (0.1 percent) and a 3.6 percent gain year-over- year.
But several metro areas tracked by the Case-Shiller report, including Atlanta, Las Vegas, Detroit and Cleveland, had prices drop to levels not seen since January 2000.
Because the Case-Shiller data are based on a rolling average, there's a lag in the reporting time for the data. Several local associations already have reported local sales data for January and February, which shows that there's been significant downward pressure on prices in the Twin Cities metro area because of a steep increase in sales of foreclosures and in short sales.
Brad Fisher, president of the Minneapolis Area Association of Realtors, said local reports based on sales through the Regional Multiple Listing Service showed a similar decline in prices.
The Case-Shiller report tracks repeat sales of the same house, but it doesn't include new construction, condominiums or attached housing. The report does include foreclosures.
Jim Buchta • 612-673-7376