Home prices hit new low in major cities

An index of home prices in large metropolitan areas has fallen to its lowest level since 2003, a new national report says.

Standard & Poor's Case-Schiller 20-City Composite Index fell by 3.63 percent in March compared with a year earlier. Home prices declined in every city in the index except Washington, D.C., which gained 4.3 percent. The biggest drop was in Minneapolis where prices fell by 10 percent in March compared with a year earlier.

Locally, prices in the metropolitan area fell by 3.4 percent during that time. "Home prices continue on their downward spiral with no relief in sight," said Standard & Poor's index committee chairman David Blitzer in announcing the figures. The rebound in prices in 2009 and 2010 was largely due to a now-expired federal tax credit for first-time home buyers, he said.

"Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession."

The latest price data underscored the economic downturn's tenacity as unemployment remains stubbornly high -- around 9 percent -- while many homeowners struggle to pay for homes worth less than their mortgages. Home ownership has fallen, dropping to 66.4 percent in the first quarter compared with a peak in the past decade of 69.4 percent in 2004, according to census data.

Kate Koplinka, a broker associate at Coldwell Banker in Moriches, said convincing owners who bought at the top of the market to take a financial hit to sell their homes is a hard part of her job.

"There's a price to stay and there's a price to go," Koplinka said. "If they want to move down to Florida to be with family . . . maybe it's better for them to take the loss." She encourages people who want to sell in the next few years to do so because "the forecasts are not looking too optimistic."

National Association of Realtors spokesman Walter Molony said prices were in a trough and would begin to improve next year. "Foreclosures appear to be peaking and will be gradually declining next year as the toxic loan resets work their way through the market, and fairly stable prices keep additional households from going under water," Molony said in an email.

According to the real estate Web site Trulia.com, condo and single-family homeowners have reduced their asking price on 25.9 percent of the 20,132 listings in Suffolk County and 28.7 percent of listings in Nassau County in the past year.

When Jeni Pentola and her husband were expecting their second child in 2007, they wanted to move out of the two-bedroom co-op at Forest Green in Islip to have more space. Before the market dropped, other co-ops were selling for $220,000, but by September of that year buyers had evaporated. They listed their property for $189,000 and have since dropped the price to $119,000, a price still higher than the $108,000 they paid in 2003.
"We are absolutely totally stuck in limbo," said Pentola, a 35-year-old Spanish interpreter. People come to look at the co-op, but lately they either don't have the credit to buy or they are still looking, she said.

"They're pickier because there's more to choose from," she said.