Home prices are falling in most major U.S. cities -- but not Buffalo -- and the average prices in four of them are at their lowest points in 11 years. Analysts expect further prices declines in most cities in the coming months.
The Standard & Poor's/Case-Shiller index released Tuesday shows home prices dropped in 19 of the top 20 cities from December to January. Eleven of them are at their lowest level since the housing bust, in 2006 and 2007. The index fell for the sixth straight month.
Home values in Atlanta, Las Vegas, Detroit and Cleveland are now below January 2000 levels. A majority of the metro areas tracked by the index now have home prices at levels dating back to 2003, just as the housing boom began.
The only market in the index where prices rose was Washington, where homes prices gained 0.1 percent month over month.
"The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's.
The Buffalo Niagara market is not included in the index. The region's average home price rose 4 percent from December to January to $142,169, while the median price rose 3.4 percent to $120,500.
Real estate professionals have said home prices in the Buffalo Niagara region never saw the surge upward, so the region was saved the crash back down that so many other communities have suffered.
The housing market remains the heaviest burden on the economy, which is showing signs of strength elsewhere. Unemployment benefit applications are at prerecession lows, consumers are spending more money, and manufacturing activity is growing at its fastest rate in seven years.
By contrast, the housing market is coming off its worst year in more than a decade for sales of previously occupied homes and its worst in a half-century for sales of new homes.
High unemployment and tighter lending requirements have kept many people from entering the market. A record number of foreclosures and short sales -- when the lender agrees to accept less than what the buyer owes on the mortgage -- are pulling down home values. Many would-be buyers are waiting on the sidelines, fearing that the market has yet to bottom out.
"A lot of people are thinking the best thing to do is to stay put or delay until conditions improve," said Jonathan Basile, economist at Credit Suisse Securities.
The pain is not uniform. It is worse in cities flooded by foreclosures and short sales. That includes Detroit and Cleveland, which are struggling with weak local economies. Miami, Phoenix, Las Vegas and Atlanta are reeling from overbuilding during the housing boom.
"Some people who want to buy don't have the time, desire or energy to fix up a foreclosure, so they don't buy them," said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Miami, where foreclosures or short sales make up two-thirds of the homes sold.
San Diego was the only city besides Washington to show year-over-year gains in home prices, although prices there rose only 0.1 percent.
Washington has stood out for its success in the otherwise tough market. Home prices in the nation's capital are up 3.6 percent year over year and have risen nearly 11 percent since they bottomed out in March 2009. And among the 20 cities, prices there have held up the best since 2000, appreciating almost 84 percent.
The Case-Shiller report measures home price increases and decreases relative to prices in January 2000 and gives an updated three-month average for the metropolitan areas it looks at.
News Business Reporter Jonathan D. Epstein contributed to this report.