Home prices continued their descent into negative territory for the fifth consecutive month in January, bringing them to the lowest level seen since the beginning of 2003.
According to the most recent Standard & Poor's/Case-Shiller Home Price Index, property values at the beginning of 2012 edged 0.8 percent lower from the previous month. The index examines real estate data from transactions that occurred between the months of November and January.
Specifically, the report indicated that the 10-city composite fell 3.9 percent on an annual basis, while the 20-city composite declined 3.7 percent during the same period. Of the cities examined, price declines were reported in 16 of the metropolitan statistical areas surveyed, while increasing in just three. Prices remained the same on an annual basis in just one city.
Miami, Phoenix and Washington, D.C. were the only markets to report a rise in home prices from a month earlier.
"Despite some positive economic signs, home prices continued to drop. The 10- and 20- city composites and eight cities – Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa – made new lows," said S&P index committee chairman David Blitzer. "Detroit and Phoenix, two cities that have suffered massive price declines, plus Denver, saw increasing prices versus January 2011. The 10-city composite was down 3.9 percent and the 20-city was down 3.8 percent compared to January 2011."
Meanwhile, the report noted that Atlanta experienced the most significant drop in home prices form both the previous month and on a six-month basis.
"Atlanta continues to stand out in terms of recent relative weakness. It was down 2.1 percent over the month, and has fallen by a cumulative 19.7 percent over the last six months. It also posted the worst annual return, down 14.8 percent," the report noted. "Seven of the cities were down by 1.0 percent or more over the month. With the new lows, both Composites are now 34.4 percent off their relative 2006 peaks."
However, the decline in home prices does have a silver lining. Housing affordability continues to hover at an all-time high, according to the National Association of Realtors. The current relationship between home prices, mortgage rates and median household incomes continues to create a number of unique and affordable options for prospective buyers. Many of these buyers were forced to wait on the sidelines at the housing market's peak, as prices were roughly 30 percent higher in a number of key marketplaces.