Home prices in the San Francisco metro area declined by 30.1 percent in March, compared to its 32.4-percent record decline in January, based on the Standard & Poor’s/Case-Shiller Home Price Index released on Tuesday. Continued additions of units to foreclosure lists and foreclosed home auctions are pushing down home prices.
The S&P home price index showed declines in home prices in the 20 major cities monitored by the index, but the price declines were not as steep as declines in January. Analysts said that the price declines were moderated by the rising number of first-time homebuyers and investors taking advantage of attractive prices of units in foreclosed home auctions and other foreclosures sources.
Home prices may be near bottoming out, analysts said, but price recovery may take a longer time as unemployment rates continue to rise and as housing units continue to be sold through foreclosed home auctions.
S&P executive David Blitzer said it will take a longer time to see a significant shift or trend in home prices.
The S&P/Case-Shiller 10-City Composite Home Price Index declined in March by 18.6 percent compared to March 2008, a slight drop from the 19.4-percent record decline. More than 50 percent of the metro areas tracked showed big declines compared to price levels in 2008.
Aside from San Francisco, the two other metro areas with the largest price declines were Phoenix, with a 36-percent decline, and Las Vegas, with a 31.2-percent decline.
The S&P index, issued every last Tuesday of the month, monitors actual price declines or gains for previously owned single-family houses. The Bay area drop of 2.2 percent in March compared to February represented the composite decline in the counties of Contra Costa, Alameda, San Francisco, Marin and San Mateo.
Patrick Newport, economist working for HIS Global Insight, said that home price levels are no longer dropping in a free fall, but they are still dropping. He expects home prices to decrease further by about 15 percent and to bottom out in 2010. But he admits that the number of housing units in foreclosed home auctions will still influence home price movements.
Based on San Diego-based research company MDA DataQuick, operators of foreclosed home auctions in California could expect additions in the next several months as mortgage default numbers increased in the first quarter.
Meanwhile, the California Building Industry Association lauded the state-issued tax credit incentives for buyers of newly-built homes. But some analysts said the tax incentives would only encourage new construction in an area where houses continue to be added to foreclosed home auctions.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosure articles and news at EForeclosureMagazine.com.
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