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Record drop in city housing prices, private survey shows

Mar 25, 2008, 15:28 GMT

Washington - The United States' 20 largest metropolitan areas have nearly all seen record drops in housing prices in January, according to a private survey released Tuesday. The S&P/Case-Shiller index of home prices fell 2.4 per cent from January and 10.7 per cent from the year-earlier period. Of the 20 cities included in the measure, 19 showed a drop in prices over the year and 16 of them at a record pace. The monthly survey's index has fallen for the last 13 consecutive months. The drop in prices has led to a record number of foreclosures by homeowners with subprime mortgages in the US since the summer of 2007, which has in turn prompted a crisis of confidence in the nation's credit markets and a wider slowdown in the US economy. 'Home prices continue to fall, decelerate and reach record lows across the nation. No markets seem to be completely immune from the housing crisis,' said David Blitzer, chairman of the Standard & Poor's index committee. The US government in its own index Tuesday estimated that home prices across the United States declined 1.1 per cent on a seasonally-adjusted basis from December to January. Prices fell 3 per cent over a 12-month period, according to the Office of Federal Housing Enterprise Oversight. On Monday the National Association of Realtors said sales of existing homes rose in February for the first time in 7 months, as some new homeowners appeared to be taking advantage of good deals. The NAR also said the national median price for existing homes fell 8.2 per cent from February 2007.

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SP4: Golly, what a surpriseMar 25th, 2008 - 16:10:28

Housing sales go up when they are at the correct price.

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JohnMar 26th, 2008 - 09:27:03

However you try to spin the data, the US economy is in deep trouble.
What next ? Ford trying to sell off its Jaguar/Land Rover group for $2billion because its desperate for cash ? To an Indian group !!

You read it here first !

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NoharnessMar 26th, 2008 - 10:05:12

The dollar isn't even paper any more. It's stored in bytes. Who can say what it is really worth? The markets do. The housing crisis leads to a banking crisis which sends the stock markets into a tizzy. Guess where most Americans have stashed what little savings they have. In mutual funds (the stock market) and in their homes.

Now we have a large number of people getting older at one and the same time and they want to sell their big house and move to a smaller house or a condominium or something. In other words, they took the advice they were given. Go buy a house. Put your savings in a house. Oh, still have a little money left over that you can save? Put it in a mutual fund!

The savings and loan game was always madness and the mutual fund business is no better and we are now finding that out the hard way. You know there has to be something wrong with the system when a banker complains about some countries having a 'savings glut'.

Fiat currencies are the root of all evil.

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SP4: Mea CulpaMar 26th, 2008 - 23:45:19

Boom and Bust cycles are a fact of investing. If you go back and study home prices, they do this every 10 to 15 years.

If you keep unscrupulous investors and lying applicants away from the homemarket, you will end up with far less volatility.

No one ever complains when things are going up, unless, of course,a Bush is in office.

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