Housing prices on the way back down. Double-dip, here we come.

Posted on January 25, 2011

Via the New York Times:

The long-predicted double-dip in housing has begun, with cities across the country falling to their lowest point in many years, data released Tuesday showed.

Prices in 20 major metropolitan areas fell 1 percent in November from October, according to the Standard & Poor’s Case-Shiller Home Price Index. The index is only 3.3 percent above the low it reached in April 2009 and has fallen fell 1.6 percent from a year ago.

“A double-dip could be confirmed before spring,” the chairman of S.&P.’s index committee, David M. Blitzer, said.

Only four major metropolitan areas didn’t see any drop in year over year housing prices.  Three of the four are coastal cities in California (Los Angeles, San Francisco, and San Diego) where building restrictions and regulations help to keep prices high and homes hard to come by.  The fourth metro area not seeing any declines is one that seems consistently isolated from the rest of the country’s financial troubles: Washington, D.C. 

Eight of the twenty metro areas hit new lows this cycle and experts expect the trend to continue.  Reportedly, the housing market usually leads the economy out of recession, but not this time.