Home Prices Plunge Record 16.3% in July

[MichaelC 160]

Home Prices Plunge

 

Tue Sep 30, 2008 9:42am EDT

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard & Poor's/Case-Shiller Home Price Indexes.

 

The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.

 

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.

 

The pace of home price declines since May has slowed to about a third of the rate of the two previous three-month periods, however, S&P said.

 

"There are signs of a slowdown in the rate of decline across the metro areas but no evidence of a bottom," David Blitzer, chairman of S&P's index committee, said in the statement.

 

Falling home prices resulting from soaring foreclosures are seen by economists as a top threat to the U.S. financial system and economic growth. A plan to remove up to $700 billion in bad mortgages from financial institutions failed to pass the U.S. House of Representatives on Monday, sending markets reeling.

 

Declines for Las Vegas, the weakest U.S. market, hit 29.9 percent from a year ago and 34.3 percent from its peak in August of 2006, S&P said. Annual declines for Phoenix and Miami for July hit 29.3 percent and 28.2 percent, respectively.

 

Markets in Atlanta, Boston, Dallas, Denver and Minneapolis showed the most evidence that a bottom has formed, with home price increases for the past three months or more, S&P said.

[megabucks41 0]

Home Prices Plunge

 

Tue Sep 30, 2008 9:42am EDT

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard & Poor's/Case-Shiller Home Price Indexes.

 

The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.

 

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.

 

The pace of home price declines since May has slowed to about a third of the rate of the two previous three-month periods, however, S&P said.

 

"There are signs of a slowdown in the rate of decline across the metro areas but no evidence of a bottom," David Blitzer, chairman of S&P's index committee, said in the statement.

 

Falling home prices resulting from soaring foreclosures are seen by economists as a top threat to the U.S. financial system and economic growth. A plan to remove up to $700 billion in bad mortgages from financial institutions failed to pass the U.S. House of Representatives on Monday, sending markets reeling.

 

Declines for Las Vegas, the weakest U.S. market, hit 29.9 percent from a year ago and 34.3 percent from its peak in August of 2006, S&P said. Annual declines for Phoenix and Miami for July hit 29.3 percent and 28.2 percent, respectively.

 

Markets in Atlanta, Boston, Dallas, Denver and Minneapolis showed the most evidence that a bottom has formed, with home price increases for the past three months or more, S&P said.

 

Hi MC, hope everything is well. Down here in the dirty South it's still tuff. I was just going over the flyer magaiznes in a few cities and to find deals and FSBO are very limited now. On the other hand there is a bunch of FRBO. Just wondering with things the way they are with our gov. and the Banks if we can still do CA's? I know in a few there wont be anymore banking for buyers to get loans and the ones that do will have to have perfect credit and 10 to 20% down. Any thoughts?

[MichaelC 160]

Ernie, first of all, we've already reached the point where buyers need 20% and A credit. Ain't easy getting approved these days.

Can we still do CA's? Sure. But realistically, figure on taking a longer time to find your t/b. And you had better be sure the terms reflect current market conditions or you'll be sitting on properties for months on end.

[GetSmart 0]

Now is the time to get owners to agree to 85% value on terms. The market is really bad and finally struck in Charlotte North Carolina market hard. Of course you have certain pockets of town that are mediocre but in order to give reasonable terms you need great terms during these tough times. Values are sinking and the end is when people start paying fair market value homes and perserve the market.

 

There are no more bargains. The time has come where you have to pay more for less. Lenders are trying to set the standard with their REO's and need investors and realtors help to get the most for a home. Real estate agents are begging owners to lower their price for a fire sale. That is irresponsible and what's causing the market to tail spin. Agents are desperate to make a sale by convincing owners to take a hit. A sale is what you use to determine value. Why sale for less and lower the value in your targeted market.

 

That's stupid and goes to prove that any bonehead and apply for a license and help destroy a perfectly good market.

[MichaelC 160]

There are no more bargains. The time has come where you have to pay more for less. Lenders are trying to set the standard with their REO's and need investors and realtors help to get the most for a home. Real estate agents are begging owners to lower their price for a fire sale. That is irresponsible and what's causing the market to tail spin. Agents are desperate to make a sale by convincing owners to take a hit. A sale is what you use to determine value. Why sale for less and lower the value in your targeted market.

Can't say I agree. There are great bargains to be had these days, especially if one is sitting on cash. I suspect many folks are after pulling out of the stock market. What's causing real estate prices to plunge isn't Realtors. It's the artifically inflated run up in prices that we experienced during the boom years. And that was caused by the lending industry playing free and easy with the rules. Now, all those folks who weren't qualified to get financing, or who bought 40% more house than they could afford, aren't paying up. The lenders are left in disarray. The taxpayer picks up the tab. It all has to shake out a bit further, I believe, and then we'll hit a bottom and this will be a time to talk about to your grandkids.

[James-Ct 0]

I'm waiting to look to buy until February at least. Post election and State-of-the-Union address I think we'll get a better idea of the housing market. What's going on now in the financial markets is going to create big opportunities to buy (IMO), much better than currently. The job lay-offs haven't really started yet and many home-owners living hand to mouth are just hanging on to the false hope that Big Brother is going to save their house.

I can't remember a single time when gov't interference in free markets helped anyone but insider fat cats (like the RTC cronies). The Fed meddling will only delay the inevitable housing correction.

 

James-Ct

[MichaelC 160]

Hi, James, and welcome aboard.

I agree that the bailout was but a bandaid on a gunshot wound. Getting the Feds involved usually means more problems, not less. And with the likelihood of a Democratic president and Democratic congress, I shudder to think what the markets are going to do after Eection Day.

[randian 0]

What's causing real estate prices to plunge isn't Realtors.

That's not entirely true. Realtors around here are pushing hard for owners to drop prices and sell (so they can earn commissions, naturally), but that strategy creates a rapid downward spiral in prices.

And with the likelihood of a Democratic president and Democratic congress, I shudder to think what the markets are going to do after Election Day.

Don't worry about that, if Obama gets elected brace yourself for the sudden rash of good economic news. We'll be out of our economic doldrums in time for his inauguration.

[MichaelC 160]

randian, don't know that I can agree with your statement regarding Realtors. The market sets the price, not the Agents. If a house is getting activity at $300K, there's no reason to drop it to $275K.

And regarding Obamessiah, I suspect you're right. Come the day after Election Day, we'll see a decidedly optimistic press corps, touting good news story after good news story. Come January 20, the government will be operating with a surplus and our manufacturing plants will be spewing butterflies out of their formerly polluting smokestacks.

[BEV! 0]

...And regarding Obamessiah, I suspect you're right. Come the day after Election Day, we'll see a decidedly optimistic press corps, touting good news story after good news story. Come January 20, the government will be operating with a surplus and our manufacturing plants will be spewing butterflies out of their formerly polluting smokestacks.

But first, lets see the

!

 

 

 

Bev!

[GetSmart 0]

Can't say I agree. There are great bargains to be had these days, especially if one is sitting on cash.

 

So where are these cash deals you speak of? Most investors I know stop actively pursuing the MLS because banks are asking to much for REO's unless the houses need an extreme rehab, and they also aren't discounting short sales as they used too, at least in my experience.

[MichaelC 160]

The cash deals are to be found in many places. But I wouldn't start with the MLS. By the time a property shows up there, you know the price has already been inflated to cover commissions. The best deals are direct with the homeowner. Find a distressed owner, (not difficult these days), make a cash offer, and you'll get your discount.

[GetSmart 0]

The best deals are direct with the homeowner. Find a distressed owner, (not difficult these days), make a cash offer, and you'll get your discount.

Homeowners are all I deal with and the ones that call me are over financed, or barely have enough equity to make anything work.

 

My experience is that distressed owners with equity find a way to use it up and then call me when their local realtor doesn't want to be bothered.

[<Steve> 82]

Now is the time to get owners to agree to 85% value on terms. The market is really bad and finally struck in Charlotte North Carolina market hard.

 

Homeowners are all I deal with and the ones that call me are over financed, or barely have enough equity to make anything work.

 

My experience is that distressed owners with equity find a way to use it up and then call me when their local realtor doesn't want to be bothered.

I think your area is starting to see the realities others have been facing for the past couple of years. Is there any residential construction going on in your area? single family houses or condos uptown? Just curious.