On June 29, S&P/Case-Shiller released its most recent home price index, which includes data through April 30. Most cities showed improvements in home prices, perhaps in part because of the federal tax credits for both first-time and repeat home buyers, which required that a home be under contract by April 30 to qualify for the credit.

However, the data show that Miami and New York continued to experience falling housing prices in April. In Miami, home prices declined by 0.8%, while in New York, they fell by 0.3%. Other cities showed only minuscule increases in home prices: Detroit and Las Vegas showed increases of just 0.2%.

IN PICTURES: 5 Simple Ways To Invest In Real Estate

The Recovery Process
What are some factors that might be impeding a housing recovery in these cities? In Miami, Dina Goldentayer of the DS Team at Keller Williams Miami Beach Realty says, "Until short sales and foreclosures are weeded out, destabilization is likely to continue. All it takes is one neighbor to bring down a building for a few months." She also points to a unique characteristic of the Miami market that could be holding prices down: "Because such a large portion of our Miami buyers are foreign nationals, they are not enticed by the first time home buyer credit but are rather waiting for the euro to rebound."

Goldentayer also notes that while the Miami market overall showed a decline in the latest index, "The market data is often too general, and does not relate to specific neighborhoods and buildings. Some are, in fact, seeing price increases, especially in the Miami Beach luxury market."

Another factor to consider is that the S&P/Case-Shiller data have a two-month time lag. StreetEasy.com's second-quarter residential real estate market report for Manhattan, reports gains in average and median prices of 3.5% and 2.6%, respectively. It also reports a 13.9% increase in closings (completed sales), a 21.9% increase in the number of homes that went under contract, and a 10.2% decrease in listings' time on the market in the second quarter compared to the first quarter of 2010. StreetEasy.com's data indicates that the situation in New York City may be better than the S&P/Case-Shiller index implies. (If you are looking to buy a home, check out 6 New Hurdles For Home Financing.)

What Happens in Vegas...
Bob Hamrick, chairman and CEO of Coldwell Banker Premier Realty, says, "Las Vegas has had some positive signals in its core industry, gaming, such as visitor volume. However, it is also dependent on a broader national and even global recovery and a clear turnaround is not yet in sight." He also says that the high number of overleveraged homebuyers in Las Vegas has kept home inventories and default notices high. (Foreclosed homes may be financially appealing, but there are many obstacles to consider before buying, check out Foreclose On High Housing Prices.)

Hamrick indicates investment properties as a bright spot, not just in Las Vegas but in other cities as well. He says investors who own rental properties are seeing annual returns of 8-12%, and that some properties even come with tenants, "the original owners who lost the home to foreclosure but did not want to uproot their family."

What about Detroit? Hamrick points out that "Detroit has been experiencing notable declines in employment due to suffering core industries. The housing bubble likely masked some structural problems in that economy, and it is now evident that those industries may suffer for an extended period. One of Detroit's problems is that several of its chief industries, notably in automotive and other production occupations, have lost ground to other areas and even countries."
The Bottom Line
The timing of a housing market recovery still appears to be highly uncertain. Foreclosures and short sales remain easy to find, and the homebuyer tax credits have distorted the housing market. We can only wait and see how home prices will shake out in the months ahead.

Catch up on the latest financial news; read Water Cooler Finance: I-Spy, IPOs And iPhones.

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