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Case-Shiller Data: Double-Dip Fears Linger

The latest data from the closely watched Case-Shiller housing price indexes shows that fears of a double dip in home pricing are well founded.



) -- The S&P/Case-Shiller Home Price Indices for February showed that fears of an unsteady recovery in home pricing across the U.S. are well founded, even as there were modest improvements versus the year ago period.

"Beginning last November, each report showed gains as fewer cities reported year-over-year declines than in the previous month; those gains ended with this report," said David Blizter, S&P's chief economist.

Perhaps more distressing, six cities prices were at their lowest levels since the prices peaked three-to-four years ago.

The latest Case-Shiller data point to a risk that home prices could decline further before experiencing any sustained gains. The worst-case scenario has always been the dreaded

double dip

in home pricing before a sustained recovery.

However, the fact that both composite Case-Shiller indexes showed improvement compared to a year ago February was the first year-over-year increase since December 2006.

Nineteen of the 20 metro areas and both Case-Shiller composite indices declined in February from January levels, with 14 metro areas and both composite indices having fallen for four consecutive months. In addition, prices reached recent new lows for six cities in February -- Charlotte, Las Vegas, New York, Portland, Seattle and Tampa.

Blitzer added that while the year-over-year data continued to improve for 18 of the 20 metro areas. It simply confirms that the pace of decline is less severe than a year ago.

"It is too early to say that the housing market is recovering...We are not completely out of the woods yet," S&P's Blitzer stated in the monthly release of the housing price data

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There have been encouraging data points in the housing market lately, too. Existing and new home sales, inventories and housing starts all showed big improvement in March statistics, driven by the homebuyer tax credit, available until the end of April.

S&P indicated that the recent positive data signals from the housing market may begin to show up in the Case-Shiller numbers in coming months, but higher foreclosure activity should keep the pressure on home pricing.

The major homebuilders, which gained last week on the latest new home sales and existing home sales data, were down in Tuesday trading.

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-- Reported by Eric Rosenbaum in New York.

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