March Home Prices Drop

The Standard & Poor's/Case-Shiller composite index of 20 metropolitan areas decreased 3.6% in March 2011 from the month before. Washington DC is the only bright spot as home prices rose 1.1% in March 2011 over February, while Seattle's prices inched upwards by 0.1%. The other 18 areas suffered more declines. Overall, the US National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The rebound in prices seen in 2009 and 2010 was largely due to the first-time home buyers 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. Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains.

Analysts noted that 9% unemployment and related job insecurity and the ongoing mortgage foreclosure mess continue to plague the housing industry -- and all the associated retail activity that goes along with new house buying. They expect the market to bump along the bottom through the end of the year, with something akin to a recovery in 2012.