According to two separate reports, released on the same day, housing prices were blown sharply lower in February, possibly by bad weather. Or is fear the reason housing's experiencing a windy spring?

The S&P/Case-Shiller home price index, which measures multiple sales prices on the same properties in 10 and 20 major metros, found in its 10-city gauge that prices were down 1.5 percent from February 2006 to February 2007, the fastest decline in nearly 15 years -- since October 1993.

In 20 major cities, prices were down one percent in the same period, the first year-over-year decrease since 2001 when the group first began keeping records. Successive monthly declines persist, said the press release, with negative prices averaging approximately five months for the 20-city index and 8 months of declines in the 10-city index. Some cities, such as Boston and San Francisco, have registered declines since spring 2006.

Modest year-over-year price increases were reported for a few cities, such as Seattle (+10.6 percent), Portland (+7.7 percent), Charlotte (+7.3 percent), Miami (+2.9 percent), Chicago (+1.7 percent), and Dallas (+1.3 percent).

The S&P/Case-Shiller indices track only single-family homes, while the National Association of Realtors monthly indexes include multi-family homes such as condominiums, townhomes and co-ops.

In a similar report, the National Association of Realtors noted that home sales also plunged in March by the largest margin in nearly twenty years, and blamed bad weather and continuing fallout from problems in the subprime mortgage market where some people are allowing their homes to be foreclosed rather than meet higher loan payments when their adjustable rate mortgages reset to higher interest rates.

The NAR said the biggest one-month decline in sales was back in January 1989 when sales dropped 12.6 percent. In March, the pace of home sales fell by 8.4 percent compared to February. After seasonal adjustments, that leaves annual sales at a rate of 6.12 million units, or about what they were in 2003.

The median price fell 0.3 percent to $217,000.

Not coincidentally, consumer sentiment is also on the wane. The Conference Board Consumer Research Center said that both its indices fell in April. The Present Situation Index, which measures how consumers feel about current conditions, fell to 131.3 from 138.5 in March. The Expectations Index, which measures consumers' outlook for the next six months, declined to 85.8 from 87.9.

That's the lowest reading since last August when high prices at the gas pump put a crimp in the economic outlook, which makes gasoline prices the wild card in the housing recovery.

Gas prices have soared 12 weeks in a row, but are still four cents a gallon lower than they were at this time last year, due to a slight easing at the gas pump. Analysts and consumers expect gas prices to rise, due to limited refinery production, increased seasonal use, and other reasons.

Consumers' expectations are that inflation will rise and that jobs will be harder to get, and they're worried about the rising price of gasoline. With the average big-city commute in the nation at about 25 minutes, gas is a concern for many households.

"Rising prices at the gas pump continue to play a key role in dampening consumers' short-term expectations," said Lynn Franco, director of The Conference Board Consumer Research Center, in a prepared release. "The decline in the Present Situation Index -- the first decline in six months -- warrants monitoring in the months ahead, as further declines would suggest a softening in growth."

Economists are also closely watching for rising foreclosures as fallout continues from subprime loans, but some analysts believe that most markets will be able to absorb additional foreclosures without hurting overall sales.

"Housing remains a great long-term investment," said David Lereah, chief economist for the NAR in its most recent outlook. "As home sales moderate, overall home prices will be essentially flat this year. The good news is that inventories remain well below the levels experienced during the last housing downturn in the early 1990s, and supplies are close to balance in many areas."

One bright spot is the slight softening of mortgage interest rates, which declined to an average of 6.17 percent for the benchmark 30-year fixed rate mortgage, allowing some borrowers to refinance out of their resetting loans. Others, benefiting from falling prices and softer mortgage interest rates are able to step up and buy, possibly improving sales for spring 2007.

Published: April 25, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.