The double-dip drop in home prices that began last year continued into the first quarter of 2011, with prices falling in 302 out of 384 metro areas tracked by Fiserv Case-Shiller. The decrease, an average of 5.1 percent as compared to the first quarter of last year, was expected, as housing demand settled to a lower level following last summer's expiration of the home buyer tax credit. Price declines in the recent quarter were also driven by a jump in foreclosure sales, which were temporarily stalled by loan processing issues that surfaced at the end of 2010.

      David Stiff, chief economist at Fiserv, noted that continued economic weakness and uncertainty continue to weigh on markets. "The stabilization of housing markets depends greatly on household confidence in the strength of the economic recovery," he said. "Unfortunately, recent economic news has done little to build confidence. Weak job growth numbers in May and June, political wrangling over the Federal government debt ceiling, and the ongoing debt crisis in Europe have all increased pessimism. Households will not become more optimistic about housing markets until they are convinced that the job market is improving and that politicians will not allow debt problems to become new economic catastrophes."

     Even tho the weakness in housing markets remains , Fiserv continues to project that home prices remain on track to stabilize by the end of 2012.

    Stiff pointed to several positive trends. "Mortgage delinquency rates have been falling for more than a year. Foreclosure rates have started to decline. The flood of bank-owned sales, which has swamped many markets, will finally begin to recede this year as fewer houses enter the foreclosure pipeline. Meanwhile, housing affordability has nearly returned to pre-bubble levels," said Stiff. "Relative to family income levels, the average U.S. home is now only 5 percent more expensive than it was in 2000."

Other key highlights from the latest Fiserv Case-Shiller Indexes include:

• Four metro areas in Washington State ( Tacoma; Kennewick- Pasco- Richland; Spokane; Olympia) are in the 10 markets projected to experience the highest home price increases for the 2011 first quarter to 2012 first quarter period.
• Eight of the 10 worst performing markets in the 2011 first quarter had unemployment rates higher than the national average.
• Six of the 10 markets that have suffered the greatest price declines from peak to the first quarter of 2011 are in California ( Merced; Modesto; Salinas; Stockton; Vallejo- Fairfield; Bakersfield- Delano).

More information on the Indexes can be found at the Fiserv Case-Shiller website at www.caseshiller.fiserv.com.

This information was based off of an article provided by Kitsap REALTORS