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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerHome prices in the United States in 20 cities declined at the fastest pace ever, weighed down by foreclosures and bank efforts to unload that extra housing.
Home prices in a 20-city sample plunged a record 18.0% in October, on a year-over-year basis, according to the S&P / Case-Shiller U.S. National Home Price survey (pdf). The index has fallen every month since January 2007. Home prices fell 17.4% in September, and 16.6% in August, each on a year-over-year basis.
All 20 cities drop
Also, every city in the 20-city index registered a decrease in October, on a year-over-year basis.
Further, prices in a 10-city survey plummeted a record 19.1% on a year-over-year basis.
Economists surveyed by Bloomberg News had expected home prices in the 20-city Case-Shiller survey to decline 17.9% in October, on a year-over-year basis.
The areas with the largest annual percentage declines were: Phoenix, -32-7%, Las Vegas, -31.7%, San Francisco, -31.0%, Miami, 29.0%, Los Angeles, -27.9%, San Diego, -26.7%.
The two markets that fared the best, Dallas and Charlotte, declined 'only' -3.0% and -4.4%, respectively.
Economist Peter Dawson tried to be as polite as possible about the year-over-year price data, without ruining his economic credentials. "The decline was large, but not that much larger than expected," Dawson said. "Unfortunately, the housing recovery is not on the horizon. We will be very fortunate if we see a bottom in prices by Q3 2009 or Q4 2009. Right now that isn't likely. If you're in the market to buy a home, you will get a lower price if you wait a quarter or two, in many markets."
Year-over-year percentage price changes in other major U.S. cities were as follows: New York, -7.5%, Chicago, -10.8%, Boston, -6.0%, Washington, D.C., -18.0%, Atlanta, -10.5%, Denver, -5.2%, and Seattle, -10.2%.
Housing Sector / Economic Analysis: Still another horrible U.S. housing sector statistic, and the sector remains in deep recession. Economists almost universally agree that the sector is far from bottoming, with the earliest recovery seen in late 2009. The U.S. economy needs a healthy housing sector to achieve adequate GDP growth levels. Therefore, it goes with without saying, then, that the sooner the U.S. Treasury implements the FDIC's model refinance program, the better: it's a key factor in not only shutting-off the toxic asset pipeline, but also ending home price declines.
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Reader Comments (Page 1 of 1)
1-01-2009 @ 12:30PM
BERT said...
I am one who still needs an explination why "non-arms length sales" such as foreclosures at record levels are touted as legitimate values? In my neighborhood our prices are down from the 2006 peak by -13%...that is about -6% per year annualized and no where near the 20 year index drops that are quoted as bad news. There were 4 recent arms length sales here and the prices are down, but certainly not dire. What's up...location, location, location is back in vogue!