Bad news for the housing market: Home prices dropped below forecasts in December.
The S&P/Case-Shiller index of property values in 20 cities fell 4 percent in December compared to 2010, according to Bloomberg. This comes after a 3.9 percent drop in November.
December’s number is the lowest level since the housing crisis began in 2006, which shows that foreclosures are keeping the market from recovering.
Bloomberg surveyed 31 economists and found that the median forecast was a 3.7 percent decline.
“We’re still dealing with a lot of distressed properties and very low absolute levels of demand,” Sean Incremona, a senior economist at 4Cast Inc. in New York, told Bloomberg. “We’re not seeing any of the stabilization in housing activity filter through to prices.”
The index is a composite of home prices in 20 metropolitan areas used as a gauge on the housing market, but it wasn’t just the 20 cities that took at hit at the end of 2011.
The national index fell 1.7 percent on a seasonally-adjusted basis in the fourth quarter, according to Reuters. Of the 20 cities in the index, 19 saw declines in prices with Atlanta taking the biggest blow, as it dropped nearly 13 percent.
"After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today's report, we had believed the crisis lows for the composites were behind us," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement to Reuters. "The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything, it looks like we might have re-entered a period of decline as we begin 2012."
There was one city that escaped falling home prices. Detroit posted a .5 percent rise in December compared to 2010, but the city saw the biggest decline from November to December by dropping 3.8 percent, according to Forbes. Dallas was close to seeing a gain by falling only .4 percent.