Home prices drop 5.1 percent in New York

Home values are falling in many cities across the United States, including New York, which saw a 5.1 percent drop in prices, according to the Wall Street Journal’s latest quarterly survey of housing market conditions. The survey found that prices declined in all of the 28 major metropolitan areas tracked during the fourth quarter of 2010 when compared to a year earlier. As the number of unsold homes increased, inventory levels rose in many markets, particularly in Long Island, which had enough homes on the market at the end of December to last 15 months at the average sales pace. The supply of unsold homes stood at 14 months in Charlotte, N.C., and Nashville, Tenn., and at nearly 13 months for northern New Jersey. Home values dropped the most in cities that have already been hit hard by the housing bust, including Miami, Orlando, Atlanta and Chicago, according to data from Zillow.com.

The falling prices are a reflection of weak demand and tight credit conditions that reduce the number of potential buyers. “There are just not a lot of renters with confidence, with a down payment, with good credit, and without a lot of additional debt,” said John Burns, a home builder consultant in Irvine, Calif. Economists say that the biggest risk to the housing market is the weak job market. “Without improvement in unemployment, confidence stays low,” said Stan Humphries, chief economist at Zillow. “Purchasing stays low.” Economists also predict that market conditions could get worse in the months ahead, as millions of homeowners are in some stage of foreclosure or are seriously delinquent on their mortgages, while real estate agents are preparing for an uptick in distressed properties hitting the market. [WSJ]