Home Prices Fall to New Recession Lows

By Kyle Chezum Updated on 5/31/2011

 

Average prices for single family homes have hit a new low this quarter, dropping to levels not yet seen during the recession.  Home prices haven't been this low across the board since 2002, the Stand and Poor / Case-Shiller index reported.  The index tracks home values for 20 major metropolitan areas in the United States.  According to the index, 19 of these 20 areas have seen significant home price declines over the past year.

Average home prices decreased by 4.2% in the first quarter of 2011, following a similar decrease of 3.6% in the final quarter of 2010.  This continued drop has brought home prices in many areas down an average of 5.1% from last year's average levels.

David Blitzer, chairman of the committee that operates and monitors the index, saw the sustained price drop as a bad omen for the future of real estate.  This month's report is marked by the confirmation of a double-dip in home prices across much of the nation.  Home prices continue their downward spiral with no relief in sight."

In addition, he claims, "the rebound in prices seen in 2009 and 2010 was largely due to the first-time homebuyers tax credit. Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession."  Other economic trends that point to recovery, such as decreased unemployment and increased job creation, may prove that the recovery is on its way.  But this doesn't mean the real estate sector is back on its feet again.