WASHINGTON (CBS/AP) — A perfect economic storm is sinking U.S. home prices to their lowest level since the housing bubble burst in 2006, driven down by foreclosures, a glut of unsold homes and tighter lending standards.
Prices fell from February to March in 18 of the metro areas tracked by the Standard & Poor’s/Case-Shiller 20-city index. And prices in a dozen markets have reached their lowest points since the housing crisis began. Prices in March rose only in the Seattle and Washington, D.C., metro areas.
The nationwide index fell for the eighth straight month.
A record number of foreclosures are forcing prices down, and they are expected to keep falling through this year.
The 12 cities now at their lowest levels in nearly four years are: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Ore., and Tampa.
Jill Schlessinger of CBS MoneyWatch.com told KNX 1070 it may take a couple more years to recover from the industry-wide fallout that left the housing market reeling.
“From 2000 to 2006, house prices doubled, and it would not be crazy to imagine that the seven years it took to double, it would take another seven years to clear out all that excess inventory,” said Schlessinger.
The housing sector is struggling even as the overall economy is in the midst of a steady but slow recovery. Some of the worst declines in home prices are in cities hit hardest by unemployment and foreclosures, such as Phoenix, Tampa and Las Vegas.
The Case-Shiller index measures sales of select homes in those cities compared with January 2000. For each of the areas it reviews, the index provides a three-month moving average price. By measuring the sales prices of the same homes over time, the index seeks to gauge market values and conditions.
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