SUSIE GHARIB: Fresh signs tonight that the troubles in the housing market
are far from over. Home prices nationwide fell for a third straight month
in nearly all cities tracked by the Standard & Poor’s Case-Shiller index.
The lone bright spot was Phoenix. Erika Miller takes a closer look at
where prices are likely to head from here.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: This home in
Lyndhurst, New Jersey, just came on the market. It joins an estimated seven
and a half million homes currently for sale nationwide including
foreclosures. Experts say a healthy level is about two and half million.
Unfortunately for sellers, the outlook for the housing market is becoming
more gloomy ahead of the key spring selling season. Residential property
values fell a steep 1.3 percent in November, according to the latest Case-
Shiller report tracking 20 metropolitan areas.
MAUREEN MAITLAND, VICE PRES., S&P INDICES: 1.3 percent over a month
is really a rather large fall and that’s coming off two months of declines
in both September and October.
MILLER: That’s not the only bad news. Home values around the
country have fallen by a third since the housing market peaked in 2006.
Prices now stand at 2003 levels. Home prices continue to suffer, despite
historically low interest rates and an improving job market. A big reason
is the vast number of homes for sale. And another wave of foreclosures
could further delay recovery in the sector. Weak demand is another factor.
MAITLAND: We really haven’t seen a turnaround in the economy. The job
markets haven’t picked up all that much and there’s a lot of lack of
confidence in the market right now.
MILLER: And many people who do want to buy homes, can’t because they
don’t qualify for financing. That’s why many economists think 2012 will be
a year of bouncing along the bottom.
DREW MATUS, ECONOMIST, UBS: I think the state of the housing market
can best be summed up as be being in a state of stabilization. It is not
likely to surge anytime soon. We are not likely to see a massive amount of
home price appreciation. Although home prices have probably, on a national
basis, at least stopped going down, they are unlikely to go up by any
material amount anytime in the near future.
MILLER: But others think 2013 may be too optimistic for a widespread
recovery in home prices. Some skeptics don’t expect a consistent rise in
home values nationwide until 2015. Erika Miller, NIGHTLY BUSINESS REPORT,
Lyndhurst, New Jersey.