Note: Reprinted from Bloomberg. Regardless of the hope of local Realtors (as voiced last month), positive spin by the Telluride Town Council and "opinions of a rebound" by Telluride Consulting, this report shows a different story that has serious impacts that does affect our local economy and will for years to come.
Subnote: Notice the only city with an increase in prices was Washington DC. Sure looks like the best way to survive in America these days is to work for the Federal Gov't.
Home Prices in U.S. Cities Fell 4% in April
By Shobhana Chandra -
Jun 28, 2011 7:00 AM MT
Home prices decreased in the year ended April by the most in 17 months, showing the housing market remains an obstacle for the U.S. recovery.
The S&P/Case-Shiller index of property values in 20 cities fell 4 percent from April 2010, the biggest drop since November 2009, the group said today in New York. From March to April, prices fell 0.1 percent on a seasonally adjusted basis, the smallest decline since July 2010.
A backlog of foreclosures and falling sales raise the risk that prices will decline further, discouraging builders from taking on new projects. The drop in property values and a jobless rate hovering around 9 percent are holding back consumer sentiment and spending, which accounts for 70 percent of the economy.
“There’s no sign of any real recovery in housing yet,” Jim O’Sullivan, chief economist at MF Global Inc. in New York, said before the report. “There won’t be a significant turn until the labor market shows sustained improvement. The level of foreclosures is still high and a lot of people are delinquent on their mortgages.”
The decrease matched the median forecast of 30 economists surveyed by Bloomberg News. Estimates ranged from declines of 4.9 percent to 3.5 percent. The year-over-year drop in March was revised to 3.8 percent from a previously reported 3.6 percent decline.
Before adjusting for seasonal variations, prices climbed 0.7 percent from March, today’s report showed.
Shiller told a conference in New York this month that a further decline in property values of 10 percent to 25 percent in the next five years “wouldn’t surprise me at all.”
The Case-Shiller gauge is based on a three-month average, which means the April data was influenced by transactions in March and February.
“This month is better than last,” David Blitzer, chairman of the index committee at S&P, said in a statement. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the spring-summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.”
Nineteen of the 20 cities in the index showed a year-over- year decline, led by an 11 percent drop in Minneapolis.
Washington showed the only increase, up 4 percent from April 2010.
Compared with the prior month, 13 of the 20 areas covered showed a increase on an unadjusted basis, led by Washington.
Reports earlier this month showed the housing market is yet to gain momentum. Sales of previously owned homes, which comprise about 94 percent of the housing market, were down 3.8 percent last month from April, the National Association of Realtors said.
Purchases of new houses dropped 2.1 percent in May, the first decline in three months, according to Commerce Department data. Competition from foreclosed homes is hurting demand for newly built dwellings.
The 1.8 million of inventory of distressed homes nationwide that may reach the market would take about three years to sell at the current pace, Daren Blomquist, communications manager at RealtyTrac Inc., said this month.
As house prices decline, owners feel less wealthy and home equity shrinks, making borrowing more difficult.
Some developers expect demand may stabilize following a poor selling season. Lennar Corp. (LEN), the third-largest U.S. homebuilder by revenue, last week said second-quarter sales fell from a year earlier and home orders were little changed, while the average price climbed. The 2010 orders were boosted by a federal tax credit for homebuyers that required contracts be signed by April 30.
“While it’s now well-documented that the expected spring selling season of 2011 simply did not materialize, it is beginning to feel like the worst days of the housing market are getting behind us,” Chief Executive Officer Stuart Miller said during a conference call with analysts on June 23.
To contact the editor responsible for this story: Christopher Wellisz at email@example.com