Although the past few months have brough economic data that hints at recovery, one important statistic hasn't improved: housing prices. The Standard & Poors/Case-Shiller index of property values report of 20 U.S. cities released yesterday shows that national housing prices have dropped to their lowest levels since 2002. “It is hard to get entirely enthusiastic about the recovery when housing prices are still falling,” said Mark Zandi, the chief economist at Moody’s Analytics. In December, the index decreased by 4 percent from a year earlier, and Detroit was the only city to see an increase from 2010.
The biggest reasons housing prices continue to drop despite the tax credits and bank incentives offered by the Obama administration are oversupply and expected foreclosures. However, home resales are climbing—up 2 percent in January—and this may be a sign that housing values could rebound soon. As Karl E. Case, a co-creator of the index, points out, “There are some bright spots."
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Even Washington, DC, which has been one of the more resilient cities during the housing crisis, has been on the downturn the past few months. Since December 2010, housing prices have gone down 0.4 percent in the capital, compared to 0.5 percent nationally.
Reason to Get Out of Bed in the Morning
It's Leap Day! By the time the next one of these rolls around, we'll be in a whole new presidential election cycle. Get excited.