NEW YORK – Damage from the housing bust is spreading to areas once thought to be immune.
In at least 14 major U.S. metro areas, prices are now at 2003 levels – when the housing bubble was just starting to inflate.
The depressed housing industry is slowing an economy that has shown strength elsewhere. And it’s starting to hurt those who bought years before the housing boom began. In some cities, people who have paid their mortgages for a decade have little or no home equity.
Prices have tumbled in familiar troubled spots, such as Las Vegas, Cleveland and Detroit. But they’re also at or near 10-year lows in Denver, Atlanta, Chicago and Minneapolis – cities that weren’t as swept up in the housing boom and bust.
“It’s been tough on the lower class, but it’s filtering up,” said Paul Dales, an economist with Capital Economics. “It may be only a matter of time before it hits the wealthy.”
Just about the only major market weathering the second wave of the housing downturn is Washington, D.C. Home prices there have risen 11 percent in the past two years.
Prices fell from December to January in all but one of the 20 cities tracked by the Standard & Poor’s/Case-Shiller home price index. The index, a gauge of national home prices, dipped for the sixth straight month. Prices in 11 of the cities are at their lowest point since the housing bubble burst.
The report measures prices relative to those in January 2000. For each of the 20 metro areas it studies, it provides an updated three-month average price.
“The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s.
In the Seattle metropolitan area, which includes King and Pierce counties, prices are back where they were in September 2004, according to Case-Shiller. Prices fell 2.4 percent between December and January, the second-steepest drop among the 20 markets the index tracks.
However, figures from the Northwest Multiple Listing Service show a recent increase in prices for Pierce County.
According to Bob Gent, NWMLS director of business development, the median home price in Pierce County rose from January to February, from $200,000 to $205,000.
Gent said Tuesday that when March figures are released next week, people can expect “another brief blip up.”
The housing market remains the heaviest burden on the economy, which is showing signs of strength elsewhere. Unemployment benefit applications are at pre-recession lows, consumers are spending more money, and manufacturing activity is growing at its fastest rate in seven years.
By contrast, the housing market is coming off its worst year in more than a decade for sales of previously occupied homes and its worst in a half-century for sales of new homes.
Staff writer C.R. Roberts and The Seattle Times contributed to this report.
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