ST. PAUL
For the fifth consecutive month, the Twin Cities in July posted the steepest year-over-year home price decline nationwide, though the metro area's average price increased from June, a respected 20-city housing price index reported Tuesday.
The Standard & Poor's/Case-Shiller index showed the average Twin Cities home price declined 9.1 percent in July from a year earlier. That's an improvement from recent double-digit declines.
On a monthly basis, the Twin Cities saw a 2.6 percent increase in July from June, following a rise from May to June as well.
Seventeen of the 20 metro areas posted positive monthly increases; Las Vegas and Phoenix were down month over month, and Denver was unchanged.
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David Blitzer, chairman of the S&P Index Committee, said the national housing market is far from recovery, with recent monthly increases a result of seasonal demand.
"Continued increases in home prices through the end of the year and better annual results must materialize before we can confirm a housing market recovery," Blitzer said in the news release.
Rising home prices are seen as a positive. While few buyers have been able to take advantage of the current market's lower prices and mortgage rates, sellers and homeowners are being burned by the dropping values. Many homeowners find themselves "under water," meaning they owe more on their mortgages than their homes are worth.
Home prices have been stabilizing, but IHS Global Insight economist Patrick Newport said in his commentary Tuesday that they likely haven't hit bottom.
"Our view is that foreclosures, excess supply and weak demand will drive prices down another 5-10 percent," Newport wrote of the national picture. "Should the economy slip into a recession (a 40 percent probability in our view), the unemployment rate will climb, driving foreclosures up and leading to an even larger drop in home prices."
Another recent indicator also shows the average Twin Cities home price declining from a year ago. In August, the number of home sales shot up 40 percent in the metro area, but the median price dropped 11 percent to $156,000 from the year-ago period, the Minneapolis Area Association of Realtors said.
Distributed by MCT Information Services
