Local Market Monitor finds many local markets hit bottom in 3Q

Home prices in many U.S. markets hit bottom in the third quarter, but some large metropolitan areas, particularly in Florida, are still in trouble, according to data from Local Market Monitor. The real estate analytics company said home price data may be skewed because of recent halts of foreclosure sales as servicers reviewed possible documentation problems. Local Market Monitor reported a “definite bottom” in Southern California, specifically the San Francisco Bay area, where the average home price stands at $642,159, a 17% drop from the peak in the third quarter of 2006. Analysts forecast that price to hold over the next year and possibly increase 1% over the next two years. Home prices in Washington, D.C., Minneapolis, Honolulu and Boston also bottomed out in the third quarter. The biggest drop over the next year is set to occur in the Daytona Beach, Fla. area, where Local Market Monitor said prices should drop another 11%. A number of other Sunshine State cities — Jacksonville, Lakeland, Ocala, Orlando and Cape Coral — should all see prices drop by 5% or more over the next year. “Our 12 month forecast is still very modest, because the job situation is still weak, but it won’t be a surprise if home prices in these markets actually do better,” according to the report. Local Market Monitor reported three Texas areas, Austin, Forth Worth and Dallas, have seen good job growth and “have the potential to beat forecasted price increases over the next year.” Write to Jon Prior.