The metro Detroit real estate market stood alone among the nation’s top 20 largest cities where home prices ended 2011 in positive territory, according to data released this morning.
But don’t uncork the champagne just yet.
While metro Detroit registered a 0.5% rise in home prices for the year, it gave back some ground in December with a 3.8% drop in prices compared to November, according to the S&P/Case-Shiller home price indices.
Metro Detroit home prices have fallen by 8% since September when looking at the month-to-month figures. And area prices are 31.6% below 2000 levels.
The nation’s 20-largest cities saw a 4% annual decline in home prices in December. The decreases were smaller from November, falling 1.1% for the top 20 cities.
Patrick Newport, U.S. economist for IHS Global Insight, has predicted another 5% to 10% in price declines before recovery begins.
Further stalls are likely because the housing picture is still clouded with delinquent and underwater mortgages, still-high unemployment, low supplies of homes for sale and weak demand, he noted.
Other cities with home prices below 2000 levels are Atlanta, roughly 12.7% off; Cleveland, 2% down, and Las Vegas, nearly 10% down.
David M. Blitzer, chairman of the index committee at S&P Indices, said that until today the thought was the worst was behind us, but December marked new record lows.
Eighteen of the 20 cities saw home prices decline in December over November. Miami and Phoenix were up 0.2% and 0.8%, respectively.
“The pick-up in the economy has simply not been strong enough to keep home prices stabilized,” Blitzer said in a statement. “If anything, it looks like we might have re-entered a period of decline as we begin 2012.”
Greta Guest, Detroit Free Press