PHOENIX - Home prices are weakening around the country, even in metro areas that were showing strength earlier in the year.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 0.2 percent in August from July. Fifteen of the cities showed monthly price declines. Prices are expected to drop further in the coming months.
The biggest drop came in Phoenix. Prices there fell 1.3 percent from a month earlier. And prices in three California cities that had been rebounding -- San Francisco, San Diego and Los Angeles -- fell by less than 1 percent in August from July.
Detroit, Chicago, Washington, New York and Las Vegas were the only cities to show monthly price increases. The 20-city index has risen 6.7 percent from its April 2009 bottom. But it remains nearly 28 percent below its July 2006 peak.
A higher proportion of foreclosed homes likely pushed down California markets, said David Blitzer, the S&P index's chairman. During the summer, foreclosures were moving swiftly. That was before allegations surfaced of mortgage lenders using flawed documents to foreclose on homes. Lenders responded by freezing foreclosures in many states.
Even with the declines, the San Francisco area's home prices have surged more than 21 percent from spring 2009, when they hit bottom. Prices in San Diego have risen nearly 14 percent and in Los Angeles they have increased by more than 10 percent in that same period. Home prices would have to rise by more than 50 percent in each of the markets to return to their peaks during the housing boom.
Those California cities "had come back very fast and very strongly," Blitzer said. "Prices come down when you get a lot more foreclosures."
Problems with flawed foreclosure paperwork could weaken home prices. That would happen if buyers fear purchasing foreclosed homes because the sale could be contested -- or even canceled -- if the previous owner claims the foreclosure was invalid.
In an October survey taken by the National Association of Realtors, about 23 percent of real estate agents said they have a client who is no longer interested in purchasing a foreclosed property due to the foreclosure-document mess.
In the short run, however, the documents problem could prop up sale prices if fewer foreclosed homes are put up for sale.
Home prices rose in many markets from April through July. But those increases were mostly fueled by government tax credits, which have expired. Now that the peak buying season is over, a record number of foreclosures, job concerns and weak demand from buyers are pushing prices down.
Most experts expect roughly 5 million homes to be sold through the entire year. That would be in line with last year's totals and just above sales for 2008, the worst since 1997.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
RIGHT NOW on ABC15.com
While Arizona can't claim the $590.5 million Powerball winner, two $1 million second prize winning tickets were sold here in the state.
A Phoenix Officer has died after he was struck by a vehicle in a hit-and-run crash Sunday morning.
A Phoenix firefighter has died after being pinned between two vehicles while working to extinguish a fire.
You can test your spelling chops with this quiz, which will judge whether you would have progressed to the preliminaries in the 2013 Scripps National Spelling Bee, set to begin on May 28.
A man in his 20s has died after apparently being hit by a train Sunday morning in Tempe.
Dr. Akhil Chouksey goes over the best ways to deal with allergy season.
The Scottsdale bistro might have trouble filling the 30 spots it’s hiring for after their epic social media meltdown.
They battle it out weekly on the Billboard charts, and now they're competing at the Billboard Music Awards.
Officials at a northern Arizona jail are investigating the death of an inmate.
Authorities have arrested three people in connection to a shooting at an apartment complex that left two people injured in Avondale, Ariz.