MichaelC 160 Report post Posted May 31, 2011 How low will they go? Home Prices in 20 U.S. Cities Fall to 8-Year LowBy Bob Willis - May 31, 2011 Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery. The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003. A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years. “With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “I wouldn’t be surprised to see prices continue to fall this year and maybe into next year.” Economists surveyed by Bloomberg had forecast a 3.4 percent decline from a year earlier, according to the median forecast of 27 economists surveyed. Estimates ranged from declines of 4.9 percent to 2.8 percent. Other reports today showed consumer confidence unexpectedly declined in May to a six-month low, and business activity in the U.S. cooled more than forecast. Stocks rose amid speculation the European Union will pledge further aid to Greece. The Standard & Poor’s 500 Index was up 0.5 percent to 1,338 at 10:37 a.m. in New York. Nationally, home prices decreased 5.1 percent in the first quarter from the same time in 2010, and were down 4.2 percent from the previous three months, the biggest one-quarter decrease since the first three months of 2009. At 125.41, the index was the lowest since the second quarter of 2002. Greece Boosts Shares Home prices in the 20 cities fell 0.2 percent in March from the prior month after adjusting for seasonal variations, a ninth consecutive decrease. Thirteen of the 20 areas posted price declines in March from the previous month, led by Charlotte, North Carolina, and Minneapolis. The year-over-year gauge provides better indications of trends in prices, the group has said. The panel comprises Karl Case and Robert Shiller, the economists who created the index. Nineteen of the 20 cities in the index showed a year-over- year decline, led by a 10 percent slump in Minneapolis. The exception was Washington, where values climbed 4.3 percent. Prices in 12 markets dropped to fresh lows in March from their 2006, 2007 peaks: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Oregon, and Tampa. ‘Double-Dip’ “This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” David Blitzer, chairman of the Case-Shiller index committee at S&P, said in a statement. Further declines in home prices are likely to constrain the consumer spending that makes up 70 percent of the economy, as homeowners feel less wealthy and have little home equity to borrow against. Reports earlier this month showed the housing market remains depressed as the broader economy slows. Pending sales of previously owned homes plunged 12 percent in April from the prior month, the National Association of Realtors said last week. The gauge measures contract signings, which typically lead closings by one to two months, a sign existing purchases will slow. Sales Fall Sales of previously owned homes, based on closings, fell 0.8 percent in April to a 5.05 million rate, with demand for distressed properties accounting for 37 percent of the total, NAR said last May 19. The overhang of unsold housing inventory will probably remain an issue for builders and buyers alike. CoreLogic Inc. in March estimated about 1.8 million homes were more than 90 days delinquent, in foreclosure or bank-owned, a so-called “shadow inventory” set to add to the unsold supply of 3.87 million previously owned homes on the market at the end of April. Builders are gloomy and project demand will remain depressed into next year, Bill Wheat, chief financial officer of D.R. Horton Inc., told a housing conference in New York on May 11. “We still see housing demand at very weak levels,” Wheat said. “It could still be a struggle in 2012.” Share this post Link to post Share on other sites
<Steve> 82 Report post Posted June 1, 2011 I'm going to pick at this a bit. I agree that the housing market is bad, right, I mean obviously, but taking such a broad sweep as 20 cities and then nationally the world is coming to an end, I would disagree. I'd bet you could find 20 cities nationally that are not decreasing. A statement as "National Decline" is more of a doom and gloom spin. "Double Dip" as in a second real estate down turn or a second economic recession? I don't think the housing market has come back, as per this article, to be able to "Double Dip." "Consumers feel less wealthy because they have little home equity to borrow against." ? Thank goodness, the borrowing is what got us into this. Borrowing and debt isn't wealth. "We could see the housing market struggle in 2012." Pretty easy guess I'd say as the market is tied to the economy now and nothing is going to change in an election year. Ok, my rant is that buying into the constant media doom & gloom, as is fashionable today, is not news. This has been going for what? 4 to 5 years now. There are opportunities out there and that is the News. YES, the economy sucks, but if you run your life with what Fox News, CBS, MSNBC etc. tell you, forget it, you won't go anywhere for sure. How low will they go? Good question as this article states we are at 2003 levels. And the real estate BOOM started after the 2001 stock market crash and crash (end) of the Tech bubble, seems we may have just about come full circle. opinion Share this post Link to post Share on other sites
MichaelC 160 Report post Posted June 1, 2011 Steve, you make some valid points but, overall, I have to agree with much of the article. For starters, any time the media allows any news out that can be construed as a negative, I take note because they go out of their way to protect their trophy who they helped usher into the White House. And when you consider how much money has gone into propping up the economy and, in particular, the real estate market, it is noteworthy when real estate is still on a downward spiral.Mind you, I am not a gloom-and-doomer. In fact, about six months ago I made the decision to stop reading the papers every morning because I was tired of the BS being dumped on me as I started my day. Subscription cancelled, and I don't regret it. Still, I can't be totally out of the loop and I scan some selected articles online occasionally. This one caught my attention because it directly relates to the business we are in. It will be interesting to see how things play out over the next few months and beyond.By the way, if anyone hasn't yet watched it, there is a terrific movie on HBO these days called Too Big To Fail. An interesting look at the near collapse of the US, (and world), economies in September, 2008. Share this post Link to post Share on other sites
<Steve> 82 Report post Posted June 1, 2011 Be informed Yes. I guess my point is we (I) can't wait for the media, a politician, or banker to save me or just repeat what they say as fact for what I think and do. There is no politician that has jobs to save the economy. I can't wait for the media to tell me things are going to be Ok. And Bankers, well forget it. So, what's left? Are we to just sit on our hands and do nothing and let gov'ment take care of us? Nope! Beat the system and strike out on your own, be self-reliant, search out opportunity, and maybe start your own business, say a L/O business? Case-Shiller didn’t mention the 5 cities that saw price increases, and one city that broke even out of the 20 cities they site.These are their stats: Their Report House Prices Rise and FallMay 2011Case-Shiller IndexU.S. 20-city index • Washington, D.C. +1.2• San Francisco +0.5• Miami +0.3• Seattle +0.2• Los Angeles +0.1• Phoenix +0.1• Tampa 0.0 • New York -0.1• Denver -0.2• Portland, Ore. -0.4• Las Vegas -0.6• Detroit -0.7• Chicago -0.8• Dallas -0.8• San Diego -0.9• Boston -0.9• Atlanta -1.2• Cleveland -1.3• Minneapolis -2.5• Charlotte -2.6 Share this post Link to post Share on other sites
<Steve> 82 Report post Posted June 2, 2011 Sorry for the rant yesterday. Sometimes I just want to beat my head against the wall. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted June 2, 2011 Rants are allowed. So is beating your head against a wall. In fact, I encourage my in-laws to do the latter on a regular basis. Share this post Link to post Share on other sites
