Metro Detroit home prices remain the most depressed in America, according to data released this morning.
The S&P/Case-Shiller Home Prices Indices through January indicated a 3.1% drop compared to January 2010 in the nation’s 20 largest cities.
In metro Detroit, the drop was more substantial – an 8.1% decline in home prices in the past year through January. Prices fell by 1.7% from December to January, according to the data.
Atlanta joined Cleveland, Detroit and Las Vegas as markets where home prices are now below their January 2000 levels. In metro Detroit, the decline is 34% from its 2000 level while the other cities home prices are less than 1% below their 2000 levels.
“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the future,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.
Brian Seibert, president of Watson Financial Group in Waterford, said that home prices won’t begin appreciating until people who owe more on their mortgages than their home’s market value are able to refinance.
“Right now we can’t do anything to help people refinance because everyone is underwater,” Seibert said. “We knew there was going to be a huge correction, but we didn’t know it would be this deep. This is not just a Michigan problem.”
The top 10 and top 20 cities have posted monthly declines for the past six months. San Diego and Washington, D.C. are the only two metro areas that have seen price appreciation in the past year.
A continuing supply of foreclosures, weak demand and an oversupply of homes for sale will likely mean another 5% drop in home prices before they start improving in the second half of the year, according to Patrick Newport, U.S. economist with IHS Global Insight.
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