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US house prices in freefall -- redux

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  • #1

    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.

    wsj.com
    http://online.wsj.com/article/SB120947475599152723.html?mod=hpp_us_whats_news


    "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.
    Error | S&amp
    http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html
    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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  • #2
    Let the good times roll!
    Modern man calls walking more quickly in the same direction down the same road “change.”
    The world, in the last three hundred years, has not changed except in that sense.
    The simple suggestion of a true change scandalizes and terrifies modern man. -Nicolás Gómez Dávila

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    • #3
      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
      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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      • #4
        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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        • #5
          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.
          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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          • #6
            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.
            "The DPRK is still in a state of war with the U.S. It's called a black out." - Che explaining why orbital nightime pictures of NK show few lights. Seriously.

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            • #7
              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).
              <Reverend> IRC is just multiplayer notepad.
              I like your SNOOPY POSTER! - While you Wait quote.

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              • #8
                Re: I got mine.

                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).
                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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                • #9
                  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).
                  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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                  • #10
                    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%.
                    That jives with my gut feeling about how things are around here.

                    -Arrian
                    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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                    • #11
                      Re: I got mine.

                      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).
                      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.
                      "I am sick and tired of people who say that if you debate and you disagree with this administration somehow you're not patriotic. We should stand up and say we are Americans and we have a right to debate and disagree with any administration." - Hillary Clinton, 2003

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                      • #12
                        Is that information readily available from a third-party? Or did the seller give him that information?
                        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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                        • #13
                          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
                          "I have been reading up on the universe and have come to the conclusion that the universe is a good thing." -- Dissident
                          "I never had the need to have a boner." -- Dissident
                          "I have never cut off my penis when I was upset over a girl." -- Dis

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                          • #14
                            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.
                            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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                            • #15
                              I hope teh bottoming off doesn't happen until 2.5 years from now.
                              THEY!!111 OMG WTF LOL LET DA NOMADS AND TEH S3D3NTARY PEOPLA BOTH MAEK BITER AXP3REINCES
                              AND TEH GRAAT SINS OF THERE [DOCTRINAL] INOVATIONS BQU3ATH3D SMAL
                              AND!!1!11!!! LOL JUST IN CAES A DISPUTANT CALS U 2 DISPUT3 ABOUT THEYRE CLAMES
                              DO NOT THAN DISPUT3 ON THEM 3XCAPT BY WAY OF AN 3XTARNAL DISPUTA!!!!11!! WTF

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