Home Prices in 20 U.S. Cities Tumbled 18.5% in December, Biggest Drop Ever

[Purveyor]

Source: Bloomberg

Feb. 24 (Bloomberg) -- Home prices in 20 U.S. cities declined 18.5 percent in December from a year earlier, the fastest drop on record, as foreclosures climbed and sales sank.

The decrease in the S&P/Case-Shiller index was more than forecast and followed an 18.2 percent drop in November. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. Separately, the Federal Housing Finance Board said prices in 2008 fell a record 8.2 percent.

Record foreclosures are contributing to declining property values and household wealth, crippling the consumer spending that makes up about 70 percent of the economy. The Obama administration has pledged to spend $275 billion to help stabilize the housing market, including $75 billion to bring down mortgage rates and encourage loan modifications.

“The massive inventory overhang in the market and the surge in foreclosures mean prices will continue to fall rapidly,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said today in a note to clients. “The administration’s rescue plan will, in time, slow the rate of decline, but it won’t happen immediately.”

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aIr7LleihO1E&refer=home

[bemildred]

1. This ought to be the last stake in the heart of the investment banks.

More foreclosures, more defunct derivative "products", more "capital" to be put up that they don't have, etc.

[physioex]

12. Ive been thinking....

What is the purpose of an "investment bank"? And I came to the conclusion to sipon of captial from the parties they deal. I guess it was "ok" in a regulated market. But with deregulation things just went out of control. Maybe in many ways it's a good thing they are gone.

[IDemo]

2. U.S. home prices tumble at record pace

Source: msnbc.com


msnbc.com news services
updated 29 minutes ago

NEW YORK - A widely watched home price index, released Tuesday, showed prices tumbled by the sharpest annual rate on record in the fourth quarter and in December.

The Standard & Poor’s/Case-Shiller U.S. National Home Price Index plunged 18.2 percent during the quarter from the same period a year ago, the largest drop in its 21-year history. Prices are now at levels not seen since the third quarter of 2003.

“There are very few, if any, pockets of turnaround that one can see in the data,” David Blitzer, chairman of S&P’s index committee, said in the statement. “Most of the nation appears to remain on a downward path.”

In the month of December, the Case-Shiller 20-city index plunged 18.5 percent from December 2007 levels, while the 10-city index dropped 19.2 percent.

Read more: http://www.msnbc.msn.com/id/29365600/

[fasttense]

3. I guess offering assistance with home mortgages,

the supposed cause of this current republicon great depression, is not such an awful thing.

[FarCenter]

6. Mortgages won't help -- there are too many houses

There are about 14 million vacant dwelling units. That's about 5 million more than normal.

The builders went far beyond demand during the boom. Prices won't go up until the excess supply is worked off.

That may take quite a while, since boomers will be moving out of their houses looking for something less expensive to retire to (or moving in with the kids).

[liberal N proud]

4. For those upset about Obama's mortgage plan...

This is why it is important. The free fall will eventually effect all of us.

I purchased my current home in 2000 and prices are not at 2003 levels, it is starting to get close to biting into my equity. We are all going to get hit if this doesn't turn around and if someone getting help provides that turn around, Fine by me.

[FarCenter]

5. Depending on where you live, prices may be back to different years

The "back to 2003" meme applies to most metros, and especially to the sand state cities that the commentators love to talk about.

It varies in other areas, from April 2006 for Charlotte to February 1998 for Detroit.

[liberal N proud]

7. The point is, it will effect us all if nothing is done.

[Mr. Hyde]

8. Why are we all so willing to let stocks plummet yet we're so worried about home prices?

All I ever hear around here is how overpriced the stock market is/was and how good it is to see the price of stocks reflecting their actual value. I for one agree. Why do we not extend that thought to the housing market than? Current devaluations represent a housing reset back to actual value and it should be allowed to occur. What we are attempting to do is to blow air back into the deflated bubble. The problem with that is, of course, the bubble is what got us here in the first place. This is nothing but populist politics.

[Mari333]

9. glad i just have a roof over my head

hunkering down. looks like i will die in this house. just glad i have one for now.

[hugo_from_TN]

10. Keep dropping.

Prices are still too high. I'm looking to buy later this year and hope we get at least another 10-20% drop before then.

[physioex]

13. Certainly I think it will be a buyers market...

For some time to come. If you are planning on buying a house to live with a good down payment and a fixed mortgage then this might be the time.

[slackmaster]

16. I agree with you, and good luck finding your dream home

:hi:

[David__77]

11. They will continue to fall. And that's good for me.

And millions of others too. It varies be locale, of course, but here in northern California, prices are still not sustained by economic fundamentals.

[slackmaster]

17. The same is true in SoCal - Too few people can afford to buy homes

Prices must come down more.

[closeupready]

14. While I feel bad for those whose homes are falling in value, this seriously makes me want to buy.

Better time to do so than it has been in about 20 years, both in terms of prices and on a personal level.

[Dappleganger]

15. Just wait until the summer

when the option-A's begin to mature.

We're probably have to sell our house in the next couple of months due to relocating and are set to lose a buttload of money. :(

[Mr. Hyde]

18. I'm glad my house isn't located in one of those cities.