[…] home prices now sit 0.7% below their March 2009 low. Over the past nine months, they’re down 11.5%.
This is ugly, to be sure. Nationally, home prices declined 5.0% over the past year. All four regions of the U.S. saw their prices decline, year-over-year:
* Midwest: -6.3%
* West: -6.2%
* South: -5.2%
* Northeast: -1.6%Clear Capital blames the rapid decline in prices on the saturation of bank-owned foreclosures. They climbed in April. Of course, home buying demand has also remained weak over the past nine months. So as inventory rises and demand sulks, prices are dropping.
Now, we can definitely call this a double dip, but it’s important to remember that it’s a self-imposed double dip. The home buyer credit essentially prolonged the housing market’s agony. Instead of allowing the market to hit its inevitable bottom, the program propped up home buyer demand for a period of time. But once that support was withdrawn, the market continued back down its inevitable path.
Perhaps without the credit, the U.S. housing market would have already hit its bottom and would now be in the process of a slow recovery. But now, as other parts of the economy improve, housing is hurting again. That makes the broader recovery even more difficult.
Uh huh. And perhaps if we hadn’t elected an “historic” President who favors crony capitalism, overspending, high taxes, and printing ever more money, we wouldn’t be in the predicament at all.
And honestly what are the “other parts” of the economy that are improving? The stock market? A fiction, inflated by the printing of money that is causing inflation in oil and gas, food, and so on — leading to a further crippling of the economy.
I’m glad the Atlantic acknowledges just how shitty the housing market is. But I’m saddened at their desire to rationalize away the destructiveness of this Administration’s policies — and progressive policy as a whole, up to and including forcing banks to lend money to those who wouldn’t and couldn’t pay — on the housing market.
Saddened. But not surprised.
On the plus side, my assessed value came back almost 5% higher than last year. I’ve never been so happy to pay more in taxes…
Housing is hurting again?
That implies the public bought into the idea housing was getting better.
And who are the people at the Atlantic kidding? The economy is getting better? Don’t those people buy groceries or gasoline?
a fine scotch,
Well, if your neck of the woods is like mine, you’ve got a huge amount of homes in foreclosure that isn’t really being acknowledged. Just wait until those foreclosed homes hit the market and really starting driving prices down.
You’ll get to pay more taxes on a house worth even less.
starting?
Yeesh.
start.
Tell me about it.
Blake,
Nope, we lead the foreclosure market back in 2005/2006 and prices have basically stabilized about 10% below where I bought my house. They’re actually finishing subdivisions now. Buncha new construction going up, at what I’d imagine are VERY attractive prices.
I’m hoping for another credit. I’m planning on buying a house soon!
*singing* Nationwide is on Chris Dodd’s Side….
crony
capitalismsocialismFixed!
A fine scotch,
Wow, you’re doing better than where I’m at. Housing prices are currently around 60% of their peak and heading lower.
Know what we need to do to stimulate the housing market? Force eeeeevil banks to lend money to anybody as long as they:
A) have a pulse
2) pinky-swear to pay their mortgage notes on time
d) promise that the money will be used to buy a house
Housing demand will grow, which makes supply shrink. When supply shrinks, prices go up! Home prices skyrocket! Problem solved!
Why didn’t anybody think of this a few years ago, like during the first housing crisis?
Yep. I’ve personally seen cases where people were still in their home nearly 2 years after they stopped making payments. The bank just didn’t want the house yet, because the market was saturated with REOs. They wait until the inventory declines, and then they’ll take the house. At that point, they’ll probably get a slightly higher price and end up losing a little less money on the default…
It’s a common phenomenon, especially here in SoCal.
If someone is in the house, it’s less likely it will be looted for the copper piping and such.
Spiny, are you north or south of the Grapevine?
[…] Double-dipping: gross at parties, worse in economies. […]
Bad news is good news? The memory of taking down OBL will probably have faded by 2012. An ongoing economic collaspse, will not.
How about this electorial college analysis? http://www.newsmax.com/InsideCover/KarlRove-2012-ElectoralCollege-Republicancandidate/2011/05/05/id/395280
Falling home prices (or rather home prices reaching an stable equalibrium) are necessary for a recovery. Had Obama allowed that to happen in 2008, the recovery might really be underway. But he didn’t.
I still maintain the Fed should have raised rates in 2006, after the housing market started to collapse. That would have accelerated the decline in the housing market, gotten the flippers out FAST, and allowed the market to reach an equilibrium on its own.
I know there was that whole “the world is coming to an end” banking crisis shortly thereafter and there likely would have been additional consequences. But I like to think a little common sense would have worked a WHOLE lot better than financial chicanery.
How about this electorial college analysis?
Somebody should compare it to Larry Sabato’s numbers from a week or two ago.
If sense really were common, wouldn’t markets be rational?
shoulda said “more rational.”
Made myself sound like a dirty socialist apparatchik there.
O/T
I don’t care if this is a hoax, it is the funniest thing I’ve read this year (besides Jeff’s takedown of Wolly)
“HOW LIZ TAYLOR, MICHAEL JACKSON AND MARLON BRANDO FLED 9/11 TO OHIO IN A HIRE CAR ”
Here’s my favorite bit of that Rove piece:
Sure. It could If the Congressional leadership stops doing stuff like this or like this. And if the GOP nominee is somebody who isn’t Romney!
I don’t care if this is a hoax, it is the funniest thing I’ve read this year
I heard about that on Rush too. The only way that could be better is if this turns out to be another case of monkeyfishing.
Sounds like a pitch for a movie. The only problem is deciding whether it’s a comedy or a horror film.
ot
the dogs of war roof
blt
hot dogs
yum
There must be some tax benefit on these REOs, i.e. losses that offset profits or something, because the banks are doing things with them that just make no damn sense.
We tried to buy a foreclosed house two doors over. We put in a total of three offers, one of which was *all cash* and got rejected each time with no counter-offer. We were offered the explanation that they didn’t want to sell it to “investors.” OK, but we’ve lived two doors over for 12 years and own two houses and five lots on the same block. In other words–even though we did intend to work on it and eventually sell it–we’re not typical flippers, we’re just concerned about the neighborhood.
They eventually sold it for significantly less than our all cash offer. To investors who live out of town.
Jim in KC… same thing happened around here. The ‘out of towners’ moved into it though and then they defaulted again about 8 months later. Several properties in our zip have recorded for much less than the property is worth – even in today’s down market – they recorded at about 25% less than what zillow was showing as the REO price.
Have you met the new owners or know anything about them?
They eventually sold it for significantly less than our all cash offer. To investors who live out of town.
Sounds like somebody at the bank got a nice all-expenses paid holiday, and somebody at the investment firm got a property for a song. In a way, I almost hope that’s what happened; at least it would be a rational explanation.
[…] “The Double Dip’s Official: Home Prices Fall to New Low”. […]
[…] […]
Here’s something that the LTC can investigate.
Here in Kane County, in my subdivision, no comparative house like mine sold for more than $325,000, but my assesed value is $435,000. My neighbors have noticed the same problem.
I met them very briefly–they pulled up to the curb when I was outside to tell me how much they liked our house. Apparently they formed an LLC to buy the house thinking they were going to get into the flipping game, guided by a local real estate agent whose, uh, proclivities, shall we say, resulted in his untimely death during a robbery.
I haven’t seen the inside, but on the exterior they’ve done the work we had cataloged as necessary, even if some of it is a little slapdash by my standards.
The biggest problem in our neighborhood–which is one of the oldest in KC; our houses were built in 1895 and 1899–is slum lords who keep houses barely livable and rent them out for Section 8 money; these guys don’t appear to be on that track, at least. It was one of the nicer houses in the neighborhood even when in need of some TLC, so I think it will end up being priced out of the slum lord ballpark.
I don’t know about where you live, Mueller, but around here you can protest that valuation. Four or five years ago they tried to jack our valuation and taxes by a factor of four. We had just refinanced at a valuation significantly lower than what they were trying to attach, so we successfully protested and our taxes only doubled.
Oh goody.
I’m sure Captain Gutsycall will do something to save us.
Mueller – they need more of your money because fewer houses are occupied.
this was explained to me on the radio yesterday.
When they explained that they needed higher assessments because Detroit need $$ to provide all those wonderful services they do …
Well, I just bust out laughing.
I sure how Bing can save us somehow.
how – hope
Ah, yes. Wonderful.
Carin, what’s Detroit’s vacancy rate? KC is close to, if not over, 25%, although I think the “official” number is closer to 10%.
Oh , it’s horrible. You’d almost need two figures. One for the vacant (uninhabitable) house and another for those in good shape just empty.
Detroit and Las Vegas are among the worst offenders by both measures–the Motor City sports vacancy rates of 19.9 percent for rentals and 4 percent for homes; Sin City has rates of 16 percent and 4.7 percent, respectively.
Which isn’t exactly that detailed, since you don’t know the breakdown of rental/ “home” rates.
#31 – where are you (generally, if you prefer not specifically)? I’m far west in the northern of the two casino boat towns, and my subdivision has seen some decline in assessed values, but I suspect if I was to try to seel, I wouldn’t get what they say I could.
I would appeal , all of you – and if you have any recent sales in the neighborhood, you have good evidence on your side. If the assessor gives way, they will do so over time, however, not all of it at once.
4% sounds like BS, unless that number is inclusive of all ‘burbs. I think the 25% non-official figure is probably close to accurate in KC, if my block and the surrounding blocks are any indication.
I wonder if $5/gallon gas will push people back in? Probably not anyone looking for a good education for their kids; they’ll make other sacrifices.
I’m feeling kinda lucky. First, because my annual assessments have been pretty darn fair, reflecting the ups and downs of the neighborhood. Second, because the downs have not completely wiped out the ups since we bought our place. I think the latter is due to my neighborhood having a deserved reputation for small, working-class houses. Being cheap and unfashionable meant that we didn’t get a lot of flippers. We have our share of foreclosures, but it’s not nearly so grim as other spots.