Index shows home prices end 2011 down

Single-family home prices ended 2011 on a downbeat note as a drop in December prices sent the seasonally-adjusted index to its lowest level since 2003, according to a closely watched survey on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas declined 0.5 percent on a seasonally adjusted basis, in line with economists' expectations, after falling 0.7 percent in November.

The 20-city index fell to 136.63, the lowest level since January 2003. The steepest declines were in Atlanta, Chicago and Detroit. Miami and Phoenix were the only cities to show an increase.

The declines partly reflect the typical slowdown that comes in the fall and winter.

Still, prices fell in 19 of the 20 cities in December compared to the same month in 2010. Only Detroit posted a year-over-year increase. Prices in Atlanta, Las Vegas, Seattle and Tampa dropped to their lowest points since the housing crisis began.

Nationwide, prices have fallen 34 percent nationwide since the housing bust, back to 2002 levels. A gauge of quarterly national prices, which covers 70 percent of U.S. homes, fell to its lowest point on records dating back to 1987.

"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," S&P's index committee chairman David Blitzer said in a statement.

"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."

U.S. stock index futures held at lower levels immediately following the data as investors also took in an earlier report that showed new orders for long-lasting U.S. manufactured goods fell in January by the most in three years.

Prices in the 20 cities dropped 4.0 percent year over year, more than forecasts for a decline of 3.6 percent. For the fourth quarter the national index fell 1.7 percent on a seasonally adjusted basis.

"House prices are continuing to be very weak even though we have seen some leveling off on the activity side of the data," said Sean Incremona, economist at 4Cast Ltd in Manhattan.

"It will take some time for that relatively positive activity to filter in to prices, but at the same time we are still looking at foreclosure issues, distressed properties and low absolute levels of activity. It is really a tough market for these prices to make any progress."

During 2011, prices declined in 19 out of the 20 cities in the index. Atlanta was hardest hit with a drop of nearly 13 percent.