Case-Shiller report shows home price damage

By Michelle E. Shaw

The Atlanta Journal-Constitution

A day after one report showed reason for optimism about home prices, another one Tuesday provided a stark reminder of metro Atlanta's housing woes.

The widely watched Standard & Poor's Case-Shiller Index said seasonally adjusted Atlanta area home prices fell 1.3 percent in March from February, and 1.2 percent year-over-year.

The drop left the index for the area at its lowest point since November 2000, meaning home prices are essentially the same as they were then.

“The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, speaking of the national market.

On Monday, the National Association of Realtors reported a 7 percent rise in metro Atlanta home sale prices in April from a year earlier, along with a 6 percent gain in sales volume. Experts said the gains were driven in part by the expiring federal home buyer tax credit, along with low interest rates.

In addition to being two months behind, Case-Shiller uses different methods. The Realtors’ results are based on closings during a given month and produce a median price. Case-Shiller follows properties sold over time, rather than individual home sales, and measures value from a baseline in 2000. Both reports track existing homes.

Raymond Morris, chief executive for ReMax Greater Atlanta, said the market is improving but very slowly.

“To get back anywhere close to where we were, at our peak, is going to be another 18 months to two years,” said Morris. “But there is definite improvement that can be seen now.”

The most recent Case-Shiller Index shows prices remain

22 percent below the market peak of April 2007.

Nationally, the 20-city Case-Shiller Index showed seasonally adjusted prices flat in March from February, while up 2.4 percent from April 2009.

“Because they track the same properties, Case-Shiller is a very reliable index,” said John Wieland, a veteran home builder. “But does this mean you can buy a house now for the same price as you could in 2000? Not exactly.”

New homes have gotten larger and finishes more expensive, he said..

“If you built a home the exact same way as you would have in 2000, same size and same finishes, you’d likely price it the same as you would have then,” he said. “But other than that, I think you’d have to go higher.”