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Foreclosures are a big reason prices are falling fast in Atlanta, where the average price sank 17.3 percent in February compared with a year earlier. That's the biggest annual drop in the history of the Case-Shiller index for any city. Yelena Shulyatyeva, an economist at BNP Paribas, said she expects 1 million homes to be foreclosed this year, up from 800,000 in 2011. Mark Vitner, an economist at Wells Fargo, said there's also a divide between so-called "distressed" home prices and the rest of the market. Distressed homes include foreclosures and "short sales." Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage. Home-price indexes that exclude distressed properties suggest that prices are inching up. For non-distressed properties, "there's really some intense competition out there," Vitner said. "A lot of houses are getting multiple bids." Humphries estimates that foreclosed homes made up about 20 percent of February sales. That figure has been 15 percent to 20 percent since late 2008, he said. In a healthy market, it's usually less than 5 percent. The Case-Shiller index showed that prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas. Phoenix and Miami are also seeing heavy foreclosures but are benefiting from intense interest among investors. The average home price in Phoenix has risen for five straight months. The average in Miami rose in February, too. Nationwide, the steady price declines have brought the Case-Shiller index to its late 2002 level. Home prices have fallen 35 percent since the housing bust. The S&P/Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.
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