NEW YORK — Metropolitan areas of the country are awakening to what Stanislaus County residents already know: The housing slump isn't over.
Tax credits and historically low mortgage rates have failed to lift home prices this year.
Prices nationally fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday.
The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, has raised concerns that the worst may be ahead. That fear is shared by other economists, who point to weak job growth, tight credit and many more foreclosures.
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"I'm worried still about the risk of a double-dip," economist Robert Shiller said.
The month-to-month drop from February to March marked the sixth straight decline. Prices in 13 of the cities fell. Only six metro areas recorded price gains. One, Boston, came in flat.
In the first quarter of this year, U.S. home prices fell 3.2 percent compared with the fourth quarter. Prices remain nearly 31 percent less than their July 2006 peak. But they have risen nearly 3 percent from their April 2009 bottom.
Although not included in the Case-Shiller index, prices also are stagnant in the Northern San Joaquin Valley.
Stanislaus County's median home price slipped slightly to $135,000 in April. The median price dropped 3.7 percent from $140,000 in March, according to data released Thursday by real estate research firm MDA DataQuick.
Prices have been bouncing around their lowest levels for several months in Stanislaus, Merced and San Joaquin counties, leading valley real estate agents to believe they have bottomed out.
Lower prices mean valley homes are more affordable, but agents say that hasn't translated into more sales and higher prices because few affordable homes are available. They say lenders have been slow to put foreclosed properties on the market.
The national numbers are especially disturbing because they show that improved sales because of the tax credits didn't translate into higher prices, said David M. Blitzer, chairman of the S&P index committee.
In a healthier economy, extraordinarily low mortgage rates would boost demand for homes. But economists say jobs remain too few and loans hard to get for small businesses and many individuals.
Unemployment rates in the valley dipped in April, but remain near 20 percent. The steep decline of the housing market from its peak in late 2005 triggered job losses, business downsizing and even closures.
Economists don't expect employment in the region to show improvement much beyond the seasonal agricultural hiring trends for some time, with double-digit unemployment possibly lingering up to five years.
Without more job creation in the valley, real estate professionals worry improvement in the market will be slow.
The National Association of Realtors said Monday that sales of previously occupied homes rose 7.6 percent in April. But the sales were aided by government incentives that have expired, and economists don't expect the improvements to last.
First-time buyers were offered a credit worth as much as $8,000, while owners who bought and moved into another home could get a credit for as much as $6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
Shiller and other economists worry that prices could fall further.
IHS Global Insight economist Patrick Newport predicts that prices will fall an additional 6 percent to 8 percent and bottom out in the third quarter of next year. He said the glut of homes on the U.S. market is the main reason, but he's also worried about the rate of foreclosure.
"When banks foreclose, they sell the properties at deep discounts," Newport said. "Foreclosures have either peaked in the first quarter or are going to peak soon, but they will remain very high for several years."
The decline in prices is discouraging for U.S. homeowners, who have seen the value of their largest asset deteriorate sharply over the past three years.
For those struggling to pay their mortgages, falling home prices makes it even harder to refinance into an affordable home loan. Mortgage delinquencies were at a record high in the first quarter.
Bee City Editor David W. Hill can be reached at email@example.com and 578-2336.