April 29, 2008, 14:25
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#1
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Emperor
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US house prices in freefall -- redux
Last month was awful, but this month's releases show an accelerating decline in house prices across the US -- a 2.66% decline for 20 major cities in only one month (January to February).
San Francisco was the worst hit, with a 5.04% one-month decline. Las Vegas declined 4.77%. LA declined 4.27%. Phoenix declined 4.08%. San Diego declined 3.60%. Tampa declined 3.11%. Miami declined 2.95%. Washington, D.C. declined 2.81%.
These are extreme declines. Impressive to watch, I must say.
One odd duck that jumped out at me was Minneapolis, with a 3.39% decline. As far as I know, Minneapolis has very little unemployment (not a Detroit situation at all), and the housing prices didn't see an extreme run-up, unlike as happened in other parts of the country.
http://online.wsj.com/article/SB1209..._us_whats_news
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"There is no sign of a bottom in the numbers," warned David M. Blitzer, chairman of S&P's index committee, noting that all 20 metro areas the indexes study were in the red for February from a month earlier.
According to the indexes, released Tuesday by ratings firm Standard & Poor's, home prices in 10 major metropolitan areas fell a record 13.6% in February from a year earlier and 2.8% from January.
In 20 major metropolitan areas, home prices fell a record 12.7% from a year earlier and 2.6% from January.
Not one city managed to avoid a February-over-January drop in prices, though Charlotte, N.C. -- the lone metropolitan area that showed annual growth in January -- eked out annual growth of 1.5% in February. No other region saw year-to-year growth.
Las Vegas and Miami again were the weakest markets, as in January, posting February declines from a year earlier of 22.8% and 21.7%, respectively.
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http://www2.standardandpoors.com/por...0,0,0,0,0.html
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 14:29
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#2
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Emperor
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Let the good times roll! 
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April 29, 2008, 14:34
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#3
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Deity
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Seems generally right... the craziest markets are seeing the biggest declines. Dunno what's up in Minny.
Is there a site that tracks all markets, such that I could find stats on the one I'm in? I'm not concerned about the value of my house (which I bought at or nor peak in June of last year), since I plan to keep it essentially forever and we've a fixed mortgage we can afford, but I'm curious.
-Arrian
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April 29, 2008, 14:38
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#4
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Chieftain
Local Time: 05:30
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I got mine.
I just bought back into the market with a house that is a short-sale with $670,000 in loans outstanding against it, and my wife and I are purchasing it for $470,000. Good news for us, bad news for the holders of the notes (especially the second, which is a $150,000 total write-off).
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April 29, 2008, 14:40
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#5
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Emperor
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Those numbers that I reference only include 2 major cities near you -- Boston and New York City. Both Boston and New York have been among the least impacted by the downturn. Boston declined 1.4% for the month and New York declined 1.2%.
I think that there are government-produced numbers on this that might go down to smaller towns, but I think the numbers that I have cited are more reliable.
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 14:40
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#6
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Emperor
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Man, I am glad I didn't buy last summer. I am going to give it two years and see what the prices are then.
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April 29, 2008, 14:47
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#7
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Technical Assistant
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Dan - curious, are there similar numbers for rents? I'm looking to rent (almost certainly not buy) in the near-downtown Chicago area, and I'm not seeing any downward movement in rents right now at all, and sort of surprised by this (though rents don't necessarily go down with purchase prices, iirc).
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April 29, 2008, 14:47
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#8
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Emperor
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Re: I got mine.
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Quote:
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Originally posted by Veritass
I just bought back into the market with a house that is a short-sale with $670,000 in loans outstanding against it, and my wife and I are purchasing it for $470,000. Good news for us, bad news for the holders of the notes (especially the second, which is a $150,000 total write-off).
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Nice. Congrats.
Looks to me like total seller capitulation out there.
__________________
I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 14:51
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#9
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Emperor
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Quote:
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Originally posted by snoopy369
Dan - curious, are there similar numbers for rents? I'm looking to rent (almost certainly not buy) in the near-downtown Chicago area, and I'm not seeing any downward movement in rents right now at all, and sort of surprised by this (though rents don't necessarily go down with purchase prices, iirc).
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I don't have rent numbers. That being said, I don't expect rental rates to decline much, if at all. The house sales prices were way out of whack compared with rents. It's taking large declines for the house prices to match rents. Once house prices start to match rents, then people will be able to support a mortgage by just renting the place out.
So far, Chicago has been one of the least impacted cities during this implosion. Still, Chicago house prices declined 1.98% from January to February.
__________________
I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 14:52
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#10
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Deity
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Quote:
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Originally posted by DanS
Those numbers that I reference only include 2 major cities near you -- Boston and New York City. Both Boston and New York have been among the least impacted by the downturn. Boston declined 1.4% for the month and New York declined 1.2%.
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That jives with my gut feeling about how things are around here.
-Arrian
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grog want tank...Grog Want Tank... GROG WANT TANK!
The trick isn't to break some eggs to make an omelette, it's convincing the eggs to break themselves in order to aspire to omelettehood.
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April 29, 2008, 14:54
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#11
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Emperor
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Re: I got mine.
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Quote:
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Originally posted by Veritass
I just bought back into the market with a house that is a short-sale with $670,000 in loans outstanding against it, and my wife and I are purchasing it for $470,000. Good news for us, bad news for the holders of the notes (especially the second, which is a $150,000 total write-off).
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Very unusual that the holder of a second would just bail like that. Usually they will try to hold on to the note hoping for some kind of settlement down the road. I would guess that the first and second were held by the same lender. Probably an 80/20 loan combo where the buyer had no money in the property to start with. This sounds like a near perfect example of the lenbding problems so prevalent in that area.
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April 29, 2008, 15:17
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#12
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Emperor
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Is that information readily available from a third-party? Or did the seller give him that information?
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 15:30
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#13
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The drop in housing prices are fundamentally a good thing, the prices were completely out of whack. Sad thing the correction had to occur so brutally though.
The miracle of the market
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April 29, 2008, 15:37
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#14
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Emperor
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Well, if the declines happened slowly, we might have a Japan situation on our hands. Seems to be better just to take our medicine and get it over with as soon as possible.
That said, I don't think we've seen these types of declines in in my lifetime. Maybe not since the Great Depression.
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891
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April 29, 2008, 15:45
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#15
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Deity
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I hope teh bottoming off doesn't happen until 2.5 years from now.
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April 29, 2008, 15:54
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#16
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Emperor
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http://www.salon.com/tech/htww/2008/...mes/index.html
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Overbuilt America
As of the end of March, 2008, there were 129.4 million "housing units" in the United States. According to a report released by the Census Bureau on Monday, 18.6 million of those homes are unoccupied -- an increase of one million over the first quarter of 2007.
18.6 million unoccupied homes sounds like an awful lot. No wonder there was a housing bust! But that number is a little misleading. 4.7 million are for "seasonal use" only, the Census tells us -- unoccupied vacation homes, in other words. 4.1 million are for rent, 2.3 million are for sale, and the remaining 7.5 million "were vacant for a variety of other reasons."
The key figure is 2.3 million -- the total number of homes that are empty and for sale. That adds up to a vacancy rate of 2.9 percent, which is the highest, reports Bloomberg, "since the bureau started keeping count in 1956." 2.2 million homes were vacant and for sale one year ago.
According to the Department of Housing and Urban Development's Second Annual Homeless Assessment Report to Congress, released in March 2008, "the total number of homeless persons reported on a single night in January 2006 was 759,101."
Assuming that number bears some reasonable relation to reality, that would mean there are 24 unoccupied homes for every homeless person in the United States.
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April 29, 2008, 15:59
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#17
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King
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I think you'll be lucky... I give it 5 years + horizon despite of those enormous drops right now... economy is not even in a proper downturn... once that starts it will be true fun, and I am kind of pessimistic... as it looks right now, we will be wishing for Japan type 'situation' with 3-4% unemployment and bit of deflation... in a year or two...
when European house prices in Ireland, UK and Spain collapse, in the middle of US depression with record inflation since early 1980's (without much ground for FED to move)... and add those hundreds of billions in bad debt on top of all those losses that financial industry suffered in US that will be THE real deal... but I give it a year or two... unless some near miracle happens and slows this down, but I don't see this coming... still you never know it's over till it's over 
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April 29, 2008, 16:12
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#18
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Deity
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Price drops are not a good thing. It's not going to result in more people owning homes, but less.
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April 29, 2008, 17:19
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