Home Prices Decline Faster in More Metro Areas

Home prices continue to drop in most metropolitan cities across the US. The trend is logically linked to the rising number of foreclosed homes coupled with consumers’ disinterest in purchasing properties, probably because of the continuing aftermath of the recent financial downturn.

Early this week, Standard & Poor’s released its index of home prices across major US cities. Data from the S&P/Case-Shiller 20-City Index showed that home prices in major US urban centers declined another 0.7% in September from August. It was the second consecutive drop of the index. It also revealed that house costs fell in 18 out of 20 cities covered by the index.

Analysts from Standard & Poor’s attributed the price decrease to a high rate of unemployment and more stringent requirements by lenders who provide credit. They added that most consumers showed fear in losing their own homes; thus, mortgage applications dipped. The same analysts believe that housing markets would not possibly show improvements until the volume of foreclosures diminish and employment rate picks up.

Home prices in Tampa, Florida dropped 0.8% in September from August, the lowest level in the city since 2003. The median price of available homes stood at $115,700 in the third quarter ending September. Market observers noted that home buyers in the city are on a spree as they receive more than 50% of discounts in prices.

In Miami, home prices fell 1.2%. It is estimated that as of the third quarter, a home out of every 41 homes received a foreclosure notice. In the nearby city of Phoenix, prices dropped 1.5% and foreclosure rate remained high: one in every 44 households.

Las Vegas showed signs of early stabilization. For the second straight month, house prices in the city rose albeit in a modest 0.1%. Analysts said buyers are apparently taking advantage of falling prices, which are currently up to 50% below peak prices in the city in 2006. However, the city has the worst rate of foreclosure in the country. One household out of every 25 received foreclosure notice in September.

Washington also posted increased home prices over the month. Market observers noted that the US capital city had smaller foreclosure rate in the period. Economists emphasized that the city posted one of the most improving economies. The city had the biggest gain in employment rate in September, which, according to analysts, could have prompted consumers to show interest in buying homes.

For more information, visit ForeclosureConnections.com.