Case-Shiller index shows home prices down in August

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A closely watched index of home prices in 20 major cities took a dip in August, as a summer sales swoon caused by the expiration of popular home-buyer tax credits slowed the market.

Prices of previously owned single-family homes fell 0.2% in August compared with July, according to the Standard & Poor’s/Case-Shiller index. Out of the 20 cities, 15 posted drops, including every city in California, where metro areas have shown improvement for more than a year.

Prices were up 1.7% in August compared with the same month last year, but the year-over-year rate of increase also slowed, underscoring weakness in the U.S. housing market.

‘A disappointing report,’ said David M. Blitzer, chairman of the index committee at Standard & Poor’s. ‘Home prices broadly declined in August.’

Los Angeles was down 0.4%, San Diego 0.6% and San Francisco 0.3%, according to the non-seasonally adjusted data. The only cities posting increases were Chicago, up 0.4%; Detroit, 0.5%; Las Vegas, 0.1%; New York, 0.2% and Washington, 0.3%.

Adjusted for seasonal variations, the 20-city Case-Shiller index fell 0.3%. But Standard & Poor’s has warned that the index’s adjusted version is no longer a reliable gauge of prices because of distortions caused by the economic crisis.

-- Alejandro Lazo