Real Estate

Home prices end 2011 at lowest level since 2002

The average price of a single-family home ended 2011 at a new low for the Standard & Poor’s/Case-Shiller index.

Prices dropped 3.8% in the fourth quarter to levels last seen in 2002.

Both the closely watched 20-city composite index and 10-city index declined 1.1% in December from a month earlier. The larger, benchmark index fell 3.9% and the 10-city index for December was 4% from a year earlier.

Of the top 20 largest metropolitan areas, just Miami at 0.2% and Phoenix at 0.8% experienced price appreciation in December from the prior month. Home prices in Atlanta fell 12.8% from a year earlier and Detroit was the only area to post a positive annual return, inching 0.5% higher than December 2010.

“In terms of prices, the housing market ended 2011 on a very disappointing note,” said David Blitzer, chairman of the S&P index committee. “With this month’s report, we saw all three composites hit new record lows. While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended.”

He said S&P believed the home prices bottomed out earlier, but the declines in December pushed the national composite to 33.8% off the 2006 peak and at a new low.

Chicago home prices for December were 6.5% lower than the prior year, while prices fell 8.8% in Las Vegas and 5.2% in Los Angeles. Prices also decreased more than 5% in San Diego, San Francisco and Seattle in December compared to the year earlier, according to S&P/Case-Shiller.

“Although the rate at which house prices are falling accelerated at the end of last year, it may only be a few more months before the decline seen over the last five years comes to an end,” analysts at Capital Economics said. “We expect prices will be broadly unchanged this year and next.”

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