(TheNicheReport.com) -- Real estate analysts and economists who have been eagerly waiting for a clear sign of a housing bottom in terms of median price for the last couple of years are paying close attention to the latest Standard & Poor's Case/Shiller home-price index. Even as the pace of home purchasing activity picks up, housing prices in cities across the United States have fallen for the last six months.
The S&P Case/Shiller home-price index compiles price figures for 20 American metropolitan areas that are indicative of major regional real estate markets. The latest report shows that home values in 16 cities experienced a decrease, while Miami, Phoenix and San Diego reported increases. Prices in the Dallas-Fort Worth market remained at their same levels.
Median home prices are now similar to how they were back in 2002. In a year-over-year basis, prices dropped in 15 of the cities tracked by the index. While this report is dispiriting, it is not seasonally adjusted. Real estate activity was encouraging during the winter, but the bulk of the purchases involved distressed properties. Foreclosures and short sales do not bolster median home prices; in fact, they tend to have a negative effect.
A bottom in home prices cannot be expected until the inventory of distressed properties pares down to a manageable level. A national housing recovery is still far from attainable. A regional recovery is more likely to take place, as seen in Miami. The attractive South Florida real estate market is once again active after years of stagnation, and thus home prices in that sunny region are on the rise.
There is also the job market to consider. The unemployment rate has come down a bit in the last few months, and real estate investors who are purchasing now are counting on a job recovery to realize profits from their speculative purchases. Job growth must continue to improve before a true bottom for median home prices can be reached.