S&P/Case-Shiller Index of Property Values Fell 3.4% in October

An index of property values in 20 US cities for October fell 3.4 percent to 140.30 from the same month last year, S&P/Case-Shiller said Tuesday morning. The index fell 3.5 percent for the year ended September. Economists had been expecting a 3.2 percent decline.

The cycle continues: The worst may be over, but the real-estate market is bracing for another round of foreclosures. With continued high unemployment levels and banks loans which are tough to get, pressured home prices may continue to delay a recovery.

On the upside, builder confidence is on the rise, as construction has risen off market lows. Less new property in the market is also helping to control demand.

Karl Case, creator of the S&P/Case-Shiller index, said, "Different things are happening in different markets. It’s very segmented. You’ve got these huge inventories that we’ve never really had before."

Case sites Atlanta and the Midwest as regions which continue to stand out in terms of weakness.

Other results from the survey include:

• home prices adjusted for seasonal variations fell 0.6 percent in Oct. from the prior month after dropping 0.7 percent in Sept;
  
• unadjusted prices decreased 1.2 percent from Sept as 19 of 20 cities showed declines;
  
• 11 of the cities fell by 1 percent or more;
  
• Atlanta and Las Vegas posted new post-peak lows in October, the report showed, only Phoenix posted a gain, and
  
• Detroit had the biggest year-over-year increase, with prices rising 2.5 percent in the 12 months to October. However, levels in Michigan were among the worst for most of the recent housing bust, so a bounce off the bottom was probably expected.

Note: SPDR S&P Homebuilders (NYSE: XHB)

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