U.S. Home Prices Take Record Plunge

Key Index Shows 19 Percent Drop In January - Largest On Record

(CBS/AP)  U.S. home prices sank by the sharpest annual rate on record in January, and the pace continues to accelerate, but there were a handful battered metro areas where price declines slowed, according to data released Tuesday.

The Standard & Poor's/Case-Shiller index of home prices in 20 major cities tumbled by a record 19 percent from January 2008. It was the largest decline since the index started in 2000. The 10-city index dropped 19.4 percent, also a new record.

All 20 cities in the report showed monthly and annual price declines, with 13 posting new annual records. Prices dropped by more than 10 percent in 14 cities.

"There are very few bright spots that one can see in the data," David Blitzer, chairman of S&P's index committee, said in a prepared statement. "Most of the nation appears to remain on a downward path."

But in Cleveland, Los Angeles, Las Vegas and Washington D.C. - areas all ravaged by foreclosures - annual price declines eased.

Six cities, including Minneapolis, Charlotte, Seattle and New York, showed smaller price declines in January compared to December.

Faring the best were Dallas, Denver and Cleveland with annual price declines around 5 percent in January.

The drop in prices has contributed to a modest increase in sales. The Commerce Department reported last week that new home sales rebounded unexpectedly last month, but were still the second-worst on record and remained well below last year's levels.

Sales rose 4.7 percent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000. Even after the revision to January's sales results, the month remained the worst on records dating back to 1963.

Economists surveyed by Thomson Reuters had expected February sales to fall to a pace of 300,000 units.

"Low mortgage rates coupled with the decline in home prices is putting a lot of affordability at the disposal of prospective homebuyers," Greg McBride, senior financial analyst at Bankrate.com, told CBS News.

Also last week, the National Association of Realtors said sales of previously occupied homes unexpectedly jumped in February by the largest amount in nearly six years as first-time buyers took advantage of deep discounts on foreclosures and other distressed properties, the National Association of Realtors said last week. Some economists say that could help moderate declines.

"We still think there is a good chance the rate of (price) decline will slow through the spring as existing home sales stabilize and perhaps pick up a bit, but foreclosures are weighing heavily on prices," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Prices in the 20-city index have plummeted 29 percent from their peak in summer 2006, while the 10-city index has fallen 30 percent. Prices have sunk back to levels not seen since late 2003.

To provide some relief, Congress in February passed a new $8,000 tax credit for first-time homebuyers and President Barack Obama is directing $75 billion to a new foreclosure prevention plan.

But the success of those efforts could well depend on how far the U.S. economy falls. While sales are showing some signs of stabilization, some economists expect prices to keep falling for the rest of this year - and maybe even longer.

"We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices," wrote Joshua Shapiro, chief economist at MFR Inc.

[sjc_1]

"getting the government off the backs" of the liars and swindlers who have now ruined us.

This was and is the case. All of Reagan's slogans were just code phrases for hogs to the trough. His rich friends that got him the job of Governor and President wanted pay back and they got it in spades. If you can contribute a million and get back a billion..that is a great return.

[cbsnewscomme]

They need to separate the Housing Market from the Work place to establish stability.

http://my.nowpublic.com/world/separate-housing-market-workplace-economic-market-part-i

http://my.nowpublic.com/world/separate-housing-market-workplace-economic-market-part-ii

http://my.nowpublic.com/world/part-iii-separate-housing-market-work-place-economy

[johnb8888]

Housing values have dropped--but they will never be worth $0, as the structures and underlying land are material assets.

This is to be differentiated from the air-castle "derivatives" and "debt packaging" deals that lack of regulation, mostly under Repig leadership, led to. These highly leveraged non-entities can easily become worth exactly nothing.

Not that some Dems didn't eagerly join in the shell game--Schumer of New York, for example, is a prime example of a Wall Street Water Boy. But the party of billionaire bankers and stock market tycoons is clearly the Repig party, and from Raygun to Bushit, they let the pirates run the Navy.

Not that Clinton was much better, he was too busy fluffing another balloon to pay much attention.

But this is a result of (largely) Repig policies and fantasies about "getting the government off the backs" of the liars and swindlers who have now ruined us.

Thanks, Repigs!

[whitemale08]

"Now" has happened in at least three phases:
1. Federal Reserve Act of 1913
2. Gutting of Glass/Steagall in Gram/Leach/Bliley Act 1999
3. Deregulation in Commodities Modernization Act of 2000

Result? An example is JP Morgan. Assets $1.8 TRILLION Derivatives $88 TRILLION

If we met someone who had $1.8 dollars in hand and risky bets placed with $88 dollars, we would immediately know that they were bankrupt.
Posted by perk235 at 3:00 AM : Apr 1, 2009 --

This is why President Obama has to stand up to the banksters and put JP Morgan, Goldman Smacks and Bank of America into receivership and bankruptcy re-organization to cancel those worthless derivatives and credit-default swaps.

Transparency and Confidence starts with bankruptcy re-organization and receivership.

[perk235]

When are people going to realize that they elected an idiot to the White House and now the whole nation is going down the drain? American dream is gone forever.
Posted by Truth4SD at 2:58 PM : Mar 31, 2009
--------------------------------------
"Now" has happened in at least three phases:
1. Federal Reserve Act of 1913
2. Gutting of Glass/Steagall in Gram/Leach/Bliley Act 1999
3. Deregulation in Commodities Modernization Act of 2000

Result? An example is JP Morgan. Assets $1.8 TRILLION Derivatives $88 TRILLION

If we met someone who had $1.8 dollars in hand and risky bets placed with $88 dollars, we would immediately know that they were bankrupt.

[sjc_1]

Can you say "bubble"? Anytime you throw out loan origination standards and lend to anyone, you will drive up prices. Think supply and demand. The demand is up because anyone can qualify for an easy money loan. House prices rise to ridiculous levels that can never be sustained. We are just returning to the more normal prices that were set before this mess.

[Truth4SD]

When are people going to realize that they elected an idiot to the White House and now the whole nation is going down the drain? American dream is gone forever.

[ontheleft]

Since when did this "Case Shiller" index become the authority on home prices?

House prices will keep going down in areas that are losing jobs. The housing market will not stabilize until the employment market stabilizes.

People think that somehow the rental market is benefiting from the housing downturn. It isn't. It takes a job to pay rent. People are downsizing or moving in with family. Vacancies are up in every area that is losing jobs - which means most areas.

[I_am_me1953]

Geeze, the housing prices are continuing to decline!

And my wifey and are are about to close.

I could have gotten a better deal???????????

Saved more $$$$$?????????

It is ALL my Wife's fault, I told her to wait but she wouldn't listen to me.

Typical woman!!!!!!!

(Ok I m being a little facetious here, before I take a beaqting for the women here.)

[SAMTORRES66]

Posted by willyn3 at 11:53 AM : Mar 31, 2009


LOL!!! nice.....

[lawyertom1]

But, as prices drop, more folks are buying as prices come within their ability to afford.

[willyn3]

Here is scary! Millions of Americans would have preferred that John McCain ("I know nothing about economics") make all of these decisions or maybe Susan Palin as President Palin had he passed on. Obama and Geitner are smart and scary but at least they're smart. I challenge any right wing voice to say they would prefer to have President Palin in the hot seat and on her way to London. Can Limbaugh or Hannity rise to the occasion?

[omega39-2009]

this bubble is slowly deflating, you haven't seen the end yet. We are still a long way away. I think it is funny O is saying be optimistic, everything will be fine. Yea Right!!!!
Posted by stryker54

You bet we have a long way to fall. Sales won't pick up until prices are in parity with the $7 hour jobs this economy now produces as the norm.

[stryker54]

this bubble is slowly deflating, you haven't seen the end yet. We are still a long way away. I think it is funny O is saying be optimistic, everything will be fine. Yea Right!!!!

[whitemale08]

Thanks Friedmanites and Reaganites.

That whole idea from British idiot John Law, who designed worthless derivatives and credit-default swaps, was stupid.

We fell for it thanks to Wall Street Republicans like Greenspan and Co.

Now President Obama is falling for it again thanks to Gheitner and Summers who refuses to put these swap machines (slot machines) JP Morgan, Bank of America, and Goldman Smacks into receivership and bankruptcy re-orgainzation.

I'm growing more and more pessimistic folks because we don't have the guts to put these banksters into receivership and cancel these worthless derivatives and credit-default swaps.

[erica0922]

Why did it take so long for this report to come out? I was thinking this would be for the month of March or at the LATEST February. I think in tough times like these, it's important to keep the current news filled with current data.

[frankly6]

Lower mortgage rates have INCREASED HOME SALES. The experts predict the excess inventory of homes will be sold within a year. that means home prices will stabilize within a year. Good news. You neocon parrots for the GOP can thank Obama for pushing interest rates down to help cause this. Of course, you either don't understand it or just want to parrot Rush. How pathetic.
Posted by DefendLiberty at 7:42 AM : Mar 31, 2009



Exactly!

[DefendLiberty]

Lower mortgage rates have INCREASED HOME SALES. The experts predict the excess inventory of homes will be sold within a year. that means home prices will stabilize within a year. Good news. You neocon parrots for the GOP can thank Obama for pushing interest rates down to help cause this. Of course, you either don't understand it or just want to parrot Rush. How pathetic.

[trillion1]

Gee whiz, a $65K house actually selling for $65K and not $150K.

[renonv5]

U.S. Home Prices Take Record Plunge

What you mean to say is that they are finally getting back to what they are actually worth and the days of gouging the public are over for a while (at least in the housing sector). This is good news!