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The Honolulu Advertiser
Posted on: Wednesday, April 30, 2008

Erosion of home values accelerates

By J.W. Elphinstone
Associated Press Business Writer

NEW YORK — In a bad omen for sellers and lenders this spring home selling season, the erosion of house values is accelerating and foreclosure filings are doubling, new data showed yesterday.

A closely watched index of home prices in 20 cities fell almost 13 percent in February from a year earlier, a record for the seven-year-old S&P's/Case-Shiller Home Price index.

The report follows news that foreclosure filings between January and March also hit a new high, and comes a day after the government said the number of vacant homes on the market also hit a record.

"Month-to-month, it gets consistently worse," said David Blitzer, chairman of the index committee at S&P, noting that February also marked the sixth straight month that all 20 cities experienced declines. "The slope is one direction. There is no sign of a bottom."

He said 17 of the metro areas the index tracks reported record annual declines, led again by Miami and Las Vegas.

Charlotte, N.C., was the only city to post an annual gain of 1.5 percent, but Blitzer noted that Charlotte's positive returns continue to diminish with each month and it was the last city in the index to reach its peak.

Nevada posted the country's worst foreclosure rate in the first quarter, RealtyTrac Inc. said yesterday, with one in every 54 households receiving a foreclosure-related notice.

Nationwide, one in every 194 households received a foreclosure filing during the quarter, more than double the same period last year.

"What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again," said Rick Sharga, RealtyTrac's vice president of marketing.

However, people without perfect credit and a significant down payment are having trouble getting loans, and that is slowing the market's recovery, Sharga said.