Is Minneapolis the new Cleveland?

Whatever recovery was underway in home market values has collapsed in the Minneapolis area. The Case Shiller Index for September, which measures the resale value of homes across the country, has shown another drop in the Twin Cities. Home values dropped an astonishing 2.1% from August to September. Only perennial economic dog Cleveland had a worse showing. Nationwide, values dropped .7%. The numbers are not seasonally adjusted.

The picture isn’t much brighter compared to a year ago. While prices nationwide have increased .6% in the last year, all of the gains in the Twin Cities have been wiped out. Market values have dropped 1.2%.

The numbers don’t get any better when seasonally adjusted. The values dropped 2.2% from August in the Minneapolis area. That puts the region dead last in the survey of 20 large cities. They dropped 1.3% over a year ago.

The numbers propel a renewed debate over whether government attempts to stimulate the economy really help, or just delay the inevitable bottom. The end of a government tax credit and near 10 percent unemployment have led to a decrease in demand, delaying a recovery in the industry that precipitated the worst recession since the 1930s, Bloomberg said.