Home Prices Plummet At Record Rate

Prices Drop By 15.8% In May; Consumer Confidence Still Low, But Rises Slightly

(CBS/AP)  Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.

Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.

Nine metropolitan cities - Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. - posted record declines in May. And the value of housing in Detroit is now lower than it was in 2000.

But a possible bright spot in an otherwise dismal report, seven metros - Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta - showed smaller annual declines.

Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.

Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last metro still showing price gains.

Amid the gloom of higher gas and food prices and a slumping housing market, Americans appear to be looking for a bit of hope.

Their outlook has brightened a bit, even though they remain the most gloomy about the current economy that they have been in 16 years, a private research group said Tuesday.

The New York-based Conference Board said that its Consumer Confidence Index stands at 51.9 for July - half of what it was a year ago - but the reading was slightly higher than the revised 51.0 in June and a bit better than the reading of 50 predicted by economists surveyed by Thomson/IFR. The improvement, albeit slight, also reverses a six-month slide since February.

The Expectations Index, which measures shoppers' outlook over the next six months, increased a bit to 43.0 from 41.4. The Present Situation Index, which measures their current assessment of the economy, was virtually flat at 65.3, compared to 65.4 in June.

"Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration, in business or labor market conditions," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.

Franco said consumers aren't likely to spend on frivolous things right now, reports CBS Radio News.

She added, however, that while consumers remain grim about short-term prospects, the modest improvement in their outlook provides some glimmer of hope. The slight improvement in the outlook "bears careful watching over the next few months," she said.

Economists closely monitor sentiment as consumer spending represents about two-thirds of all economic activity. The reading comes as the nation's retailers are entering the critical back-to-school season, the most important period behind the holiday season.

Stocks rose Tuesday, rebounding a day after a big tumble, on the improving confidence. The Dow Jones industrial average rose 111.45, or 1.04 percent to 11,246.53 in midmorning trading.

But the Consumer Confidence report - derived from responses received through July 22 of a representative sample of 5,000 U.S. households - showed that consumers' worries about business conditions and jobs aren't going away.

Those saying jobs are "hard to get" edged up to 30.3 percent from 29.7 percent in June, while those claiming jobs are "plentiful" declined to 13.5 percent from 14.1 percent.

Consumers' outlook, while slightly improving from last month, continues to be grim.

Those anticipating business conditions to worsen over the next six months did ease a bit to 32.4 percent from 33.5 percent, while those expecting conditions to improve edged up to 9.3 percent from 8.5 percent in June. But the percent of consumers expecting fewer jobs in the months ahead increased to 37.1 percent from 35.7 percent, while those anticipating more jobs remained virtually unchanged at 8.2 percent.

Another worry is a slowing job market, because job security is key to consumers' willingness to spend. Cautious employers, uncertain about the economy and their own sales prospects, have cut jobs each month so far this year. Economists are bracing for more job losses when the government releases the employment report for July on Friday.

Economists expect payrolls to drop by 72,000 in July, which would mark deeper cuts than the 62,000 logged in June. The unemployment rate, now at 5.5 percent, probably will climb to 5.6 percent. The jobless rate is expected to keep moving higher this year and next, hitting 6 percent or more early next year.

The Consumer Confidence survey has a margin of error of plus or minus 2.5 percentage points.

[sparks224]

Who in their right mind would vote Republican?

[legend900]

Who in there right mind would live in Las Vegas

[whitemale08]

Thanks Ronnie for deregulation and trickle-down voodoo economics.

Thanks Ronnie for shutting down our high-paying manufacturing so we would have to rely on credit cards, teaser rates etc. to supplement our manager''s salaries of $9.87 hr that require''s us to go into debt for the job training.

Thx...Ronnie Reagan.

[newview08]

A good part of my neighborhood was purchased by speculators and turned into a rental block after the market fell through and they couldn''t dump them. I agree, drop baby drop! Send ''em to the soup lines. We need more owner-occupied houses. Bring back the American community.

[drivelphobe]

Why is it a bright spot for areas like Tampa, Boston, Atlanta and a few others who saw smaller declines? A bright spot for who? Housing is way overpriced and and the larger and faster the declines in value, the better. Let the speculators take it in the shorts. Let some average people get a chance to buy a home to live in. We need to see another 35%-45% drop before housing prices are in line with incomes.

Drop baby drop!

[newview08]

Remember when the wealthy businessmen during the great depression wanted to overthrow Roosevelt in a coup for his plan to re-distribute wealth to the poor, and install a fascist government? It was only after Congress got wind of it that the plot was stopped. Interesting bit of American history, not unlike what''s happening to our country today by the very same people.

[noloyalisti]

I never thought I would actually live in a fascist country. And people want more of the McSame? As I saw on a sign held up by a "patriot" wearing flags. Get a brain morans.

[iphyt4u]

The unemployment percentage just doesn''t seem right. There''s a lot more than just 5.5% of society looking for a job. Drive through an inner city area in America, and drive through a rural small town. They both have the same problem, poor paying jobs at best, no jobs at worst.

[noloyalisti]

The Surge is Working. The middle class is almost dead as is political dissent along with it. The Reagan privatization conspiracy to hand our money over to their CEO benefactors is almost complete. Mission Accomplished!

[Razzl]

We''re past the point where inflated home prices were the problem, even in bubble markets like LA; the problem now is getting market players to resume funding and/or securitizing mortgages for all types of lenders, which is what the Fannie/Freddie flap was about a couple of weeks ago (when fed moves to preemptively support Fannie and Freddie caused panic and loss of confidence instead, aided by the usual right-wing pure-market trash talkers). Until mortgages are being written again for first-time homebuyers all other segments of the market which rely on existing-home sales will continue to collapse...

[lfitts1]

Congress makes the rules, not the President. The President can only work with what is provided to him.

And with the do-nothing Democrat Congress, that equals nada.

Of course, it is all according to the Democrat''''s master plan. They intend to make us all dependent on them for welfare checks and housing vouchers.

Posted by DemWatcher

And don''t let the fact that there was both a republican president and republican majority in both houses of congress interfere with your revisionist history--it must be the democrats fault--who cares if they weren''t the majority--your mind is made up--we will try not to confuse you with the facts...

[pollroller1]

Well, I''m really not too worried. I''ve seen these cycles before. Y''all may think I''m crazy, but now is the time to buy bank stocks. Just make sure that you do your homework first. There are some bargains out there right now in both stocks and real-estate.

[ofbyfor1]

Hope everybody realizes the consequences that those ''For Sale'' signs will have in your neighborhood.
1-lower property values (the positive side is to ask to have your house reassessed--lower assessment value equals lower property taxes)

2-taxes may go up if local tax base is devalued drastically

3-empty houses invite crime--you''ve heard of ''urban blight'', welcome to ''suburban blight''.

Not good to have multiple properties in any neighborhood abandoned or for sale. Very few positive sides of this for the average homeowner. Just FYI, I''ve been paying my low-rate fixed mortgage every month since August ''93.

[edward1975-2009]

Don''t worry the Feds will come in and bail out these crooks at the expense of the taxpayers. Hey it''s only money.

[redbds]

It is a great time to buy a house. Some really good bargains to be found right now.

[lochlan-2009]

"Home Prices Plummet At Record Rate"

Well, let''s see. Fed needs to increase interest rates to stop run away inflation, which is already here.
Fed bails out ARM''s, replacing them with gov. (tax payer) backed loans at fixed rates.
Now free to increase interest rates, dollar will rise, commodities will fall, and, when it comes to buying a house, the monthly $$$ amount the average can afford means the house needs to come down in price as mortgage rates go up.

Rocket Science.

[mecury69]

"Correct, and most occurred of this under the "watchful eye" of a GOP majority Congress."

Posted by boatdocster at 02:24 PM : Jul 29, 2008

Whoa, nice b**ch-slap on that post. :)

[docpeter-2009]

Of course, it is all according to the Democrat''''s master plan. They intend to make us all dependent on them for welfare checks and housing vouchers.

Posted by DemWatcher at 02:07 PM : Jul 29, 2008
_________________
HEY! Where can I get one of those "housing vouchers"? I would like to be a home owner again. But with my screwed-up credit from a failed business that isn''t likely to happen very soon.

[r9119111]

DemWatcher: Give us a break. You wouldn''t know the truth if it slapped you in the face.

[cepe10-2009]

Home Price Index shows lower decline in home prices 29-Jul-08 09:13 am
http://www2.standardandpoors.com/spf/pdf...

Jan-Feb -2.72%
Feb-March -2.23%
March-April -1.36%
April-May -0.78%

Homes in the 20 state average which is weighted toward heavier loss states showed a narrowing loss rate to 0.78% month to month.

Substantially down from the previous months.

All these markets had RISING home values:
CO-Denver GA-Atlanta MA-Boston MN-Minneapolis NC-Char lotte NY-New York OR-Portland TX-Dallas