SAN FRANCISCO (KCBS) – Home prices in San Francisco dropped from December to January according to the latest Standard & Poor’s/Case-Shiller home price index released Tuesday.

Prices in San Francisco were down 2.5 percent, the sharpest decline of any of the 20 cities tracked in the report.

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But Chris Thornberg with Marin-based Beacon Economics said that consumers have to look at inventory, sales and employment, all things that will give a better picture of how the housing market is recovering.

“My ongoing forecast for the economy is pretty straightforward. 2012 is going to be better than 2011 and 2013 is going to be better than 2012,” said Thornberg.

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“The ongoing question right now is how much better? Are we going to be able to pick up enough speed to claw our way back to those long-run trend lines or are we going to continue to muddle through in what you might call normal growth,” Thornberg said.

Prices fell in 17 of the 20 cities in January compared to the same month in 2011.

Thornberg said inventory traditionally grows in the spring and prices normally peak early on, but supply should be better in the latter part of the season.

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