WASHINGTON — Don't take the latest snapshot of U.S. home prices too seriously. The Standard & Poor's/Case-Shiller 20-city index released Tuesday ticked up in July from June. But the gain is merely temporary, analysts say. They see home values taking a dive in many major markets well into next year.
That's because the peak home-buying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales. A short sale is when a lender lets a home-owner sell for less than the mortgage is worth.
Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year, according to analysts surveyed by MacroMarkets LLC. And Moody's Analytics predicts the Case-Shiller index will drop 8 percent within a year.
Among the areas likely to endure big price drops, according to Veros, a real estate analysis company:
■ Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
■ Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
■ Las Vegas, which led all declines in the latest report and is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.
The S&P/Case-Shiller does not measure markets near Lexington including Louisville or Cincinnati.
This year, about 2 million, or 41 percent, of the 5 million homes sold this year will be distressed sales, predict analysts at John Burns Real Estate Consulting in Irvine, Calif. Distressed sales include foreclosures and short sales.
For next year, that figure is on pace to hit 2.4 million homes, or 45 percent of all sales. In healthy housing markets, distressed sales typically make up only 6 to 7 percent of annual sales.