Some economists say the housing market is showing early signs of stabilization, but sinking home prices continued to take the teeth out of a more vigorous recovery in November, according to a new report.
Nineteen of the 20 metro areas tracked by the S&P/Case-Shiller home price indices slumped lower in November, with just Washington, D.C. and Detroit reporting modest upticks in year-over-year price data. Overall prices fell almost 4 percent, and are now on par with prices seen back in mid-2003, the report noted.
"The only positive for the month was Phoenix, one of the hardest hit in recent years," David Blitzer, chairman of the S&P index committee, said in a release. "The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand."
Some of the downtick has to do with—you guessed it—foreclosures. Foreclosures represented a larger share of sales in November compared to October, according to Stan Humphries, chief economist at Zillow, and because foreclosures usually sell at quite a discount, the uptick in those types of sales pushed down price data.
Still not all of the price declines can be explained by foreclosures. "Even adjusting for the impact of more foreclosures in the month, this latest price signal indicates a continued weak housing market that still hasn't yet reached bottom," Humphries wrote in an Email.
Translation? The housing market still has a long way to go before we start seeing anything that resembles or feels like a recovery. Recent proposals aimed at addressing the widespread foreclosure issues that have dogged many communities are getting more attention, but until the massive overhang of inventory is dealt with, homeowners aren't likely to see hefty home value bumps and would-be buyers could cower on the sidelines longer.