US home prices continued downward spiral in April: survey

ABS-CBN News

Posted at Jun 24 2008 11:49 PM | Updated as of Jun 25 2008 07:49 AM

Agence France-Presse

WASHINGTON - Home prices in major US cities continued a downward spiral during April compared with property values a year earlier, a closely watched survey said Tuesday.

Home prices in some cities endured record-low annual price drops in the year to April as the troubled US property market remained in a deep rut more than two years after the collapse of a multiyear boom, according to the Standard & Poor's/Case-Shiller Home Price Indices.

"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," said David Blitzer, chairman of the S&P Index Committee.

The survey showed that the worst-hit metropolitan areas remain the cities of Las Vegas, Nevada, and Miami, Florida. Both cities rode a building boom before the housing bubble fizzled out in early 2006.

Prices in the casino hub of Las Vegas have slumped 26.8 percent in the year to April while values in Miami have tumbled 26.7 percent over the same period.

The price index, a measure of property prices in 10 major metropolitan areas, showed a record decline of 16.3 percent in the 12 months to April as the housing market's woes showed few signs of abating.

The survey showed that home prices in Chicago; Cleveland, Ohio; and Denver, Colorado remained under pressure, but values in the three cities showed "some improvement" compared with price declines in March.

Patrick Newport, an economist with Global Insight, said further home price declines could be on the way, but he said that other surveys tracking the housing market are not as bleak as the latest S&P/Case-Shiller survey.

"Unfortunately, all methods devised to measure house prices have shortcomings, and it is impossible to state with any precision how much house prices are actually falling nationally or locally," Newport said.

Some cities are weathering one of the worst downturns in US home prices in recent decades relatively well.

On a monthly basis, the report showed that Charlotte, North Carolina, and Dallas, Texas, were the only two cities to enjoy two straight months of price increases during April.

Economists say that lackluster economic growth, a credit crunch squeezing the financial markets and rocketing energy costs have also dented housing demand.