No Relief in Report on Housing

The latest housing report indicates that further declines are in store for the weak American market, or at best a period of long, slow recovery.

Home prices in the United States fell by more than 1 percent in October, a survey showed on Tuesday, but the low prices have attracted investors to some of the cities where they have declined the most.

The private Standard & Poor’s/Case-Shiller index, a closely watched measure of home prices, was down 1.2 percent from September, according to nonseasonally adjusted data tracking 20 cities.

Nineteen of the cities experienced price declines, with prices reaching new lows in Atlanta since its 2007 peak and in Las Vegas, from its 2006 peak, S.& P. said. Only Phoenix posted a gain, with a 0.3 percent rise, the Case-Shiller data showed.

“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” said David M. Blitzer, the chairman of the index committee at S.& P.

Another report, however, pointed to some recovery and helped ease the sting of the report on home prices. The Conference Board’s consumer confidence index rose to 64.5 in December from 55.2 in November, reaching its highest level since April. Analysts had forecast a level of 58.9.

“Consumer optimism is on the rise as job prospects improve, and the summer doldrums seem to be behind most Americans,” said Chris G. Christopher Jr., the United States economist with IHS Global Insight. “In November, the unemployment rate fell to 8.6 percent, and gasoline prices are falling, offering some relief to consumer mood and spending.”

But neither the discouraging home-price data nor the sharp gain in confidence appeared to have much impact on the stock market in the United States, which is winding down the year with light trading. The indexes hovered between gains and losses most of the day.

The Dow Jones industrial average was down about 0.02 percent, or 2.65 points, to 12,291.35. The Standard & Poor’s 500-stock index rose less than a point to 1,265.43, while the Nasdaq was up 0.3 percent at 2,625.20.

Both the S.& P. and the Dow are on track to finish 2011 in positive territory, despite the lackluster investor sentiment and volatility that uneven domestic economic data and concerns over the euro zone sovereign debt crisis stirred up in the past year. The benchmark 10-year Treasury note rose 6/32 to 100. The yield fell to 2 percent, from 2.02 percent on Friday. Markets were closed on Monday.

The housing sector has been destabilized since the financial crisis of 2008, hit by foreclosures, a glut of supply, weak demand, and a struggling job market — all of which is making for a lackluster recovery.

Patrick Newport, an analyst with IHS Global Insight, forecast that those factors could force down prices another 5 percent to 10 percent next year.

“Our forecast is they will hit bottom in the second half of 2012,” said Mr. Newport. “We still will have a lot of foreclosures. That is still going to stay high for another several years.”

The Case-Shiller report on housing prices for October was worse than expected, exceeding analysts’ forecasts for a 0.4 percent drop for that month, compared with the seasonally adjusted 0.6 percent monthly decline in the 20-city index. The index was down 3.4 percent from a year earlier, with Atlanta recording the worst annualized rate, dropping by 11.7 percent.

However, housing statistics from other sources since the October survey showed relatively healthy activity, Mr. Blitzer wrote in the S.& P. report.

“I think going forward we are going to be bumping along the bottom,” he said in a telephone interview. “I do not see this as getting ready for a big plunge.”

The National Association of Realtors said last week that sales of single-family houses, town houses, condos and co-ops in November rose to 4.42 million, their highest level in 10 months, according to its latest revised data. But there were also signs that buyers were still nervous and lenders were being cautious about approving loans — the association said that a third of all contracts signed in November did not lead to closed sales. Data on starts for single-family housing also rose, Mr. Blitzer also noted.

Robin Lemon, a realtor with the AtlantaPros Team, said parts of Atlanta have been particularly hard-hit by the recession, affecting companies and in turn, nearby housing.

“Obviously there are some pockets that are not seeing a decrease in home values,” said Ms. Lemon, who was in between showing condos to a client. “The hard hit ones are those areas where the businesses have suffered. South Atlanta has been hit really, really hard.”

She and other experts in the business said that the low prices were attracting investors who were taking advantage of low rates on mortgages.

“There are definitely those folks who are taking advantage of the market and buyers are definitely out there, but they do not want to pay full price and they expect a 10 percent price reduction if it is a foreclosure,” she said.

In Nevada, investors were snapping up single-family homes and restoring them, said Paul Bell, the president of the Greater Las Vegas Association of Realtors. The association said on its Web site that the median price of single-family homes sold in November was $125,000, up 3.3 percent from $121,000 in October.

“We are going through a lot of current inventory that is not in very good condition,” Mr. Bell said in a telephone interview. “We are seeing a big increase in that type of activity, and they are paying cash and going in and doing a first-class job in getting these single-family homes restored. Investors can lease those homes pretty quickly and get a cash flow until the market is ready for them.”