Good news for the housing market? Not today.
According to figures released Tuesday morning, home values are still in the tank, with three key price indices sinking in the fourth quarter to their lowest level since the housing crisis began seven years ago.
According to the S&P/Case-Shiller Home Price Index, on a national level values fell by almost 4% in the fourth quarter compared to 3Q, and are down 4% year-over-year.
Major cities suffering the largest price declines over the past year include: Atlanta (-12.8%), Las Vegas (-8.8%), and Chicago (-6.5%).
"These numbers say that momentum matters and we're still on a downward path," said Yale economist Robert Shiller who helped developed the index with S&P. He added that, "We've had a lot of good [housing] news but not sustainable good news."
S&P reported that its 10- and 20-City composites fell by 1.1% in December on a sequential basis, and was off 4% from December 2010. Overall, 18 of the 20 top MSAs saw monthly declines in December over November. (S&P/Case dissects the housing market through three measurements: national averages and two different city subsets.)
"In terms of prices, the housing market ended 2011 on a very disappointing note," said David M. Blitzer, chairman of the Index Committee at S&P Indices. "With this month's report we saw all three composite 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 added: "After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today's report we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011."
Blixner acknowledged that new and existing home sales are on the rise but noted that "prices tend to be the last thing to turn."
He and other economists blame the sustained crisis on a huge "shadow" inventory of foreclosed homes. Over the next few years upwards of 4 million additional homes may face foreclosure.
