WASHINGTON — Thought the housing crisis was over? Not quite.
Despite four years of falling prices and signs they were finally bottoming out, homes are expected to lose still more value in many metro areas, including Denver, over the next year.
Parts of the country already pummeled by the housing crisis, such as Las Vegas, Phoenix and Miami, will be hit hardest. But even some places that have rebounded or held up relatively well — including New York, Los Angeles and Washington, D.C. — will suffer, too.
That’s the conclusion of economists who have been reducing their estimates for home prices as the outlook for the economic recovery has darkened. The number of homes for sale or headed for foreclosure is so high that they think prices will be even lower by next July.
Because housing is such an important engine of the economy, lower prices could dim the recovery. When home values fall and people have less equity, they tend to cut back on spending. And as prices decline, potential homebuyers stay on the sidelines, slowing sales even more.
Earlier this year, analysts said they thought home prices had finally reached their low point and were ready to start rising slowly in most areas of the country. Now, they think the actual bottom could be nearly a year away.
The average home price in the Standard & Poor’s Case-Shiller index of 20 big U.S. cities is forecast to drop nearly 2 percent this year from a year earlier, according to the average estimate of more than 100 economists polled this month by MacroMarkets LLC.
Price drops of more than 10 percent are expected in the Phoenix, Miami and Las Vegas areas over the next year, according to Moody’s Analytics.
Moody’s predicts that other areas — New York, Los Angeles, San Diego, San Francisco, Denver, Detroit, Cleveland, Minneapolis, Tampa, Fla.; and Washington D.C. — will see declines of 2 to 8 percent by next July.
