Posted on 01/27/2009 7:15:57 AM PST by central_va
Widely watched private index shows housing prices falling by record annual amount in November
NEW YORK (AP) -- A closely watched index shows home prices dropped by the sharpest annual rate on record in November.
The Standard & Poor's/Case-Shiller 20-city housing index released Tuesday tumbled by a record 18.2 percent from November 2007, the largest decline since its inception in 2000. The 10-city index dropped 19.1 percent, tied with October for the biggest drop in its 21-year history.
Both indices have recorded year-over-year declines for 23 straight months. Prices are at levels not seen since February 2004.
Prices in the 20-city index have plummeted 25.1 percent from their peak in July 2006. The 10-city index has fallen 26.6 percent since its peak in June 2006.
All 20 cities recorded year-over-year declines in November.
(Excerpt) Read more at finance.yahoo.com ...
Home prices will continue to drop until they reach a price level where the average family can afford to purchase an average priced home for no more than twice the average salary less the 20% down payment. This ain’t politics it is simple Economics 101.
P.S We ain’t there yet.
... and my local and school taxes will soon follow, right?
/sarc
Oh no! People who have owned their homes less than 5 years may not profit on a sale! The sky is falling!
Investors in spec homes have a problem. Those living in their homes may need to stay longer than they want, or sell at a loss. If they sell at a loss, they will probably make it up buying at a lower price than they otherwise would.
We're seriously considering buying a second home, and renting out the one we live in. If I sell the one I live it, I'd lose a little. Its fair market value right now is probably 10% less than I paid. However, the home I'm looking at has also declined in value by an equal amount. So I'd break even on the swap.
It’s not about hurting people who want to make a buck on flipping houses anymore. Your comment is glib and does not address the real current problem. The fact that most everybody who bought a home in the last 5 years would lose money on it if sold today means that 100s of thousands of Americans who have lost their jobs in the last year are not able to easily relocate to find a new job. They are not all (or even most) speculators. A huge percentage of of the middle class is now upside down and must choose between moving to get a better (or any) job and short selling or foreclosing their home. The greedy people already took their beating. What you are seeing now is the damage spreading to the honest folks.
You’re right, it is spreading to the honest folks, but no purchase of a home is guaranteed not to decline in value. The froth in the housing market was obvious for anyone willing to look in the last five years. People who could afford that risk or knew they wouldn’t be moving soon—beyond hoping not to lose their job—could rationalize such a purchase. So could someone first selling into that same overheated market. First-time purchasers could prudently have decided not to buy into the peak of the market and wait for the bargains that are just now beginning to appear.
It makes no sense to bankrupt the country in order to try against hope to sustain the inflated prices, however, because some people who couldn’t afford it bought too late into the mania.
Where are all the folks who said, one year ago, “best time to buy ever! bargains galore!” I hope they are enjoying their 18% average drop in value. Say, that about wipes out your equity, doesn’t it?
Here in the Sacramento area of California, houses are down about 30% average year over year. OUCH! That’s got to hurt. “Best time to buy ever” my butt. In fact, bargains will be available for the next 5 years at least during the long, slow recovery (although interest rates will be heading sharply up sooner than later).
The reason the sky is falling is not because people who bought after 2003 are upside-down on their homes. The reason the sky is falling, is because a hell of a lot of people who bought their homes long ago, even had them paid off, extracted some or all of the equity in their homes to party like no tomorrow for home remodelling, furnishings, cars, TVs, vacations. I maen, people were pulling out money and spending it on things like going to the Super Bowl. Poof. Home equity gone in 60 seconds!
That is why the sky is falling. Responsbible people didn’t do this, but a hell of a lot of people bought the lie that real estate always goes up and they DID do this and are way upside-down on home and their homes repossessed. Haven’t you seen the articles here about people who inherited a family home free and clear and then lost it to foreclosure repossession when they sucked all the equity out to play?
That is why the sky is falling — which is a pretty good defintion of double-digit inflation, despite the government’s on-going attempts to doctor the numbers decade after decade.
I’ve had to sell a house at a loss after shutdowns that coincided with my military mandatory move. Anyone who bought at the peak of the market is screwed BY THEIR BAD JUDGMENT. I’ve rented when it made no sense to buy, and have no desire to bail out those who thought they would make a quick killing.
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