MichaelC 160 Report post Posted November 27, 2007 Declining Prices November 27, 2007Home Prices Down 4.5% Nationwide From Last Year By MICHAEL M. GRYNBAUM The troubled housing sector reached a new low this summer, and consumers remain deeply skeptical about the economy, according to reports released today. Prices of single-family homes in the third quarter fell 4.5 percent nationwide compared to a year ago, according to the Standard & Poor’s/Case-Shiller National Home Price Index. It was the largest drop since the index since the index was begun in 1988. A separate survey by S.&P./Case-Shiller of home prices in 20 major metropolitan areas showed a drop of 4.95 percent in September from a year ago, the biggest decline in more than six years. Prices declined 0.9 percent in September alone, and were down in all 20 metropolitan areas, the survey found. The Case-Shiller surveys are widely followed by investors. A steady rise in foreclosures tied to the struggling mortgage market has weighed down housing demand and boosted business inventories. Tightened lending standards have also made it more difficult for Americans to procure the loans needed to purchase homes. The result has been a steadily worsening drop in value. Home prices fell 3.3 percent nationwide in the second quarter from a year earlier, and 1.7 percent in the first quarter. Prices were still rising as recently as the fall of 2006. “We are fast approaching the rate of price decline seen at the end of the 1990-91 recession,” wrote Joshua Shapiro, chief United States economist at MFR, in a research note. “The odds strongly favor blowing past this mark in coming months.” The decline in the housing sector and the upheaval in the credit markets have also dragged down consumer sentiment. An index of consumer confidence reached 87.3 in November, its lowest level since October 2005, the Conference Board said today. Consumers have faced pressures from rising oil prices and the difficulties in the mortgage and lending markets, leading businesses to fear a steep drop-off in spending over the usually lucrative holiday season. In September, Miami, San Diego, and Phoenix recorded the steepest monthly declines in single-family home prices, all in excess of 1.5 percent. Prices in the New York City area dipped 0.3 percent in September, after a 0.7 percent drop in the prior month. Share this post Link to post Share on other sites
-Tony- 0 Report post Posted November 28, 2007 They can't get anything right so I don't listen. Black Friday doubled what they expected and Wal Mart showed a 60% increase over last year. Interest rates are right around 6% and the bond market is good. These are key indicators for a market to strentghen. Otherwise don't bust till my house sells, then I will pick up some rock bottom deals. . . Share this post Link to post Share on other sites
MichaelC 160 Report post Posted November 28, 2007 Wish I shared your optimism, Tony. But all of the key indicators I look at, (specifically for the real estate market direction), are all decidedly negative: inventory is soaring, sales are dropping, new building permits are dropping, and foreclosures are hitting record levels never seen before. All this surely points to a further decline in real estate activity and prices. About the only thing that isn't terrible news is interest rates. They're still fairly reasonable and low. . .if the buyer can qualify. Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted November 28, 2007 Wouldn't a decline in new housing starts be GOOD for the resale market? So long as the population in your area is increasing then if there are fewer new homes being built then there's going to be more demand available for existing homes. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted November 28, 2007 Wouldn't a decline in new housing starts be GOOD for the resale market? So long as the population in your area is increasing then if there are fewer new homes being built then there's going to be more demand available for existing homes.At some point that might be considered a positive indicator. But with so much inventory available, and with the builders dropping prices and giving all sorts of incentives to move their existing properties, we are far from seeing it. Share this post Link to post Share on other sites
phil43 0 Report post Posted November 28, 2007 Wouldn't a decline in new housing starts be GOOD for the resale market? So long as the population in your area is increasing then if there are fewer new homes being built then there's going to be more demand available for existing homes.At some point that might be considered a positive indicator. But with so much inventory available, and with the builders dropping prices and giving all sorts of incentives to move their existing properties, we are far from seeing it. ...And with the increasing foreclosures (we haven't seen anything yet!) the inventory will continue to grow. Throw in more stringent loan requirements, and you have glut of houses for years to come Phil Share this post Link to post Share on other sites
Doug Pretorius (ON) 9 Report post Posted November 28, 2007 What a spectacular opportunity for the Lease Purchase business! Share this post Link to post Share on other sites
