Home Price Declines Continues: Down 16.6%
The Case-Shiller Home Price Indices data through August 2008 shows "continued broad based declines in the prices of existing single family homes across the United States, a trend that prevailed throughout the first half of 2008 and has continued into the second half."
Nine of the 20 regions have record annual declines. Phoenix and Las Vegas are now returning -30.7% and -30.6% versus August 2007, respectively. Each of the California markets- Los Angeles, San Francisco, and San Diego- are down more than 25% from their values 12 months ago. Miami and Tampa, the two Florida markets, are down 28.1% and 18.1%, respectively.
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August 2008 Home Price Index
table via TFS Derivatives
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Source:
National Trend of Home Price Declines Continues into the Second Half of 2008
S&P, October 208, 2008
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_102831.pdf
Tuesday, October 28, 2008 | 10:00 AM | Permalink
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Comments
how about a graph of house price over time: eg now vs past 10 or 20 years.
Posted by: bruce | Oct 28, 2008 10:16:47 AM
How about the shorting of VW?
Up 600% in one day. That's got to make you sick.
Same thing will probably happen here in US but what stock?
Posted by: John Borchers | Oct 28, 2008 10:26:43 AM
Hey JB, how 'bout GGP? ;-)
Posted by: wunsacon | Oct 28, 2008 10:33:36 AM
Inflation...LOL! Please tell me that any delusions concerning inflation are over. Every frigging asset class is falling hard gang. You had your inflation and didn't even recognize it because you bit on the China/BRIC Phenom thinking the world would somehow avoid the slowdowns associated with economic cycles let alone the world's biggest credit bubble. The other side of credit is DEBT meaning it must be paid back.
For all our supposed sophistication, we were screwed much worse than our Grandparents during the Depression. So all you economic wizards from Yale, Harvard and so forth can eat shit because you know shit concerning the workings of the real economy.
Posted by: SPECTRE of Deflation | Oct 28, 2008 10:45:54 AM
Total lack of confidence in the markets. Very amazing. I'll keep buying here consumer confidence can't go much lower.
Fed cuts 100 points?
Posted by: John Borchers | Oct 28, 2008 10:47:31 AM
That 2 month lag is critical. I'd imagine we'll see Miami down 50% from the peak by the end of the year, and that's only reflecting the October 31 report. Could be lower when it's all said and done.
Something interesting I noted after exporting to Excel: the housing bubble seems to have started well before Greenspan began cutting rates. That doesn't mean his actions didn't exacerbate the problem dramatically - IMHO it was like adding oxygen tanks to a garage fire - but it looks like some kind of housing spike would have occurred with or without ZIRP.
Posted by: Byno | Oct 28, 2008 10:49:12 AM
@JB: Market will probably yawn (or panic) at a 100 pt rate cut. They're out of bullets. This sucker's going down hard. Might as well stop trying to catch falling knives and let it happen. Save your powder for another day.
I'm mostly long too but am chomping at the bit to get out on a decent rally or two, which is basically what most seem to be waiting for. I, for one, am tired of fighting the tide.
Posted by: Jeff M. | Oct 28, 2008 10:52:39 AM
All Hail SPECTRE of Deflation!!
Posted by: wunsacon | Oct 28, 2008 10:56:39 AM
My guess is the market lows break and nothing much more negative happens.
Posted by: John Borchers | Oct 28, 2008 10:58:17 AM
23M SPY shares traded in last 5 minutes. Kinda moving up a bit.
Posted by: John Borchers | Oct 28, 2008 11:01:59 AM
Those lonely green numbers for Boston won't be green next month.
Posted by: Renting in Mass | Oct 28, 2008 11:15:52 AM
I say good. Maybe home prices will come back down to where the average person can buy a house like me.
Easy credit caused the prices to skyrocket maybe going back to 20/80 for people who qualify for a load will bring them back in line with wages.
They are screwing people who didn't go crazy buying over priced property by keeping housing prices high.
Posted by: mdave | Oct 28, 2008 12:01:27 PM
It's the bottom! It's the bottom!
Posted by: National Association of Realtors | Oct 28, 2008 12:12:58 PM
In 1965 you could buy a new three bedroom ranch house on a city lot for $9950. Minimum wage was $1.25 an hour. Today that same house will cost you at least $149250 or a 15 fold increase. Minimum wage is $6.55 an hour or a 5 fold increase. This doesn't take into consideration the loss in the dollar's purchasing power during those 43 years due to inflation. The numbers don't make sense and I see housing prices coming down alot more before they level off unless the FED puts a floor under housing as well.
Posted by: Pat G. | Oct 28, 2008 12:28:09 PM
Pat G. @ 12:28:09 PM
Median income is a better metric than minimum wage. Also, you’ve got to take into account all the government programs (since 1965) to support housing, not the least of which is Fannie and Freddie, which has substantially “lowered the bar” for house purchases.
(Nevertheless, I think house prices will decline over the next 12 months).
Posted by: DL | Oct 28, 2008 2:39:07 PM
