ONE ON ONE WITH NEIL GARFIELD
| COMBO ANALYSIS TITLE AND SECURITIZATION |
U.S. Home Prices Slump Again, Hitting New Lows
EDITOR’S COMMENT: How many more people need to lose their life savings, equity and possession of their home in this fake foreclosure scam before we stop it?
By DAVID STREITFELD
A new slide in housing prices has begun in earnest, with averages in major cities across the country falling to their lowest point in many years.
Prices in 20 major metropolitan areas slid 1 percent in November from October, according to the Standard & Poor’s Case-Shiller Home Price Index released Tuesday. The index has fallen 1.6 percent from a year ago.
Nine of the 20 cities in the index sank in November to new lows for this economic cycle: Chicago; Las Vegas; Detroit; Atlanta; Seattle; Charlotte, N.C.; Miami; Tampa; Fla.; and Portland, Ore. Only a handful of places — essentially, California and the District of Columbia — went counter to the trend and had rising prices over the last year.
Whether the long-predicted double dip is looming or has already arrived is a quibble of semantics.
David M. Blitzer, chairman of S.& P.’s Index Committee, does not count a downturn as a double dip until it exceeds the previous low. The index is still 3.3 percent above the low it reached in April 2009. Mr. Blitzer thinks a double dip could be confirmed before spring.
“We shouldn’t kid ourselves,” he said. “The last few months have been weak.”
Cities that were never mainstays of the boom are suffering unduly in this latest bust. Atlanta, Chicago and Portland have dropped more than 7 percent over the last year, with much of the tumble in October and November.
By this point, the problems in the housing market are well known. Builders built too much, lenders lent too much, and people bought too much. The binge was epic and so is the hangover.
The era during the middle of the last decade when many people thought houses were a great investment is long gone. A house in Atlanta is worth almost exactly the same as it was 11 years ago, the Case-Shiller data shows. And that is before adjusting for inflation.
Cities like Minneapolis and Charlotte did not do much better. “I don’t know if that’s a disaster, but it’s certainly a disappointment,” Mr. Blitzer said.
The Case-Shiller Index is a three-month average of prices, so shifts in the market take a long time to play out. The market has been experiencing what S.&. P. called “an unambiguous deceleration” since last May. That, not coincidentally, was when the government’s special tax credit for buyers was ending.
The tax credit particularly strengthened sales of cheaper houses, and now its absence is speeding their fall. In Atlanta, for instance, prices for lower-priced homes fell 32 percent over the last year, the Case-Shiller data shows.
“It’s a direct reversal from the way things were during the credit,” said Paul Dales, senior United States economist at Capital Economics.
There are few calls to bring back the tax credit, even among the Realtors who championed it when it was first proposed and then when it was extended. Nor are other forms of stimulus or stabilization being widely proposed.
“There seems zero interest in doing anything along these lines,” said the economist Dean Baker, co-director of the Center for Economic and Policy Research. “My view is that we should just let the market adjust and try to help out the homeowners who are hurt most by this.”
Mr. Baker has proposed letting foreclosed owners stay in their homes as renters. The idea has gained little traction.
One hopeful sign for real estate is that on both a seasonally adjusted and an unadjusted basis, the Case-Shiller declines measured in November were less than in October. The 20 cities fell 0.5 percent on seasonally adjusted basis in November after a 1 percent drop in October.
Nevertheless, analysts said the declines would continue, even if not as sharply as in 2007 and 2008. “The enormous supply overhang of existing homes — particularly factoring in all those in foreclosure or soon to be — promises to keep pressure on prices for some time,” said Joshua Shapiro, the chief United States economist of MFR Inc.
Mitch Kaminer, the president-elect of the Atlanta Board of Realtors, said the November Case-Shiller numbers were ancient history. “Atlanta’s a strong market,” he said. “I’m expecting the January numbers to be much better. I can’t say it often enough: this is a great time to buy.”
Mr. Kaminer was speaking after he had just finished showing a house in Dunwoody, Ga., to a Chicago transplant. The agent ticked off its selling points: four bedrooms, three-and-a-half baths, a close-in location. The asking price of $439,000 was a sharp discount to the $525,000 it might have fetched a few years ago.
But the potential buyer did not go for it. “Just like every other buyer out there, he wants to make sure he’s getting a great deal,” Mr. Kaminer said.
In others words, today might be a great time to buy, but tomorrow might be even better. It is a conviction the housing market cannot seem to shake.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud |
There’s something going on with the California numbers behind the scenes at least in LA County. If you look up properties on Trulia, you’ll see selling prices fluctuate up and down through those months. I also know of homes which show higher than normal selling prices that I know for a fact didn’t actually “sell” and have been sitting vacant since 2009. Just now, the bank is getting ready to put some of them on the market. The ones I know of involve Wells Fargo. The numbers have now been adjusted back down. Hopefully, someone looks into this. The realtors are somehow involved. More fraudulant numbers on behalf of the banks.
No surprise there. Nobody’s buying! Nobody can get financing. Title insurance companies are not giving out policies like they’re candy anymore. And whoever can afford to buy a house these days, well chances are they don’t have clear title. So why on earth would anyone want to buy a house right now? Well, maybe if housing prices go through the floor . . .
ian
Yes. The complete focus is on investors (and banks — who are also investors) — who were ALL already bailed out. It was a bad bail out — never addressed the victims. And, I am not seeing enough — anywhere — to address the victim fraud. Problem is — they will not be able to fix without divulging predators — wishing and a hoping — will not fix the housing market..
Need to address fraud against victims — and until that is done here, by government, and in courts — it will remain a crisis — and all will suffer as a consequence to economy.
I am not seeing the real advocacy against consumer fraud — anywhere. Heard a short sale dealer answer to someone’s question: “well what if loan is not with the bank — and is a default loan – maybe falsely??”” Answer was — ” you mean an investor loan??””
Investor loans?? are those ALL non-compliant/default GSE loans in bank SPVs??
Maybe — maybe all bank subprime were GSE kick outs — as a (False) default — and the only creditor IS a default debt “investor” – and that would be from the onset. Beginning to think these so called SPVs were set up this way to begin with — debt buyers for GSE rejects. Banks sitting in wings — for subprime “default” GSE kick-outs. Of course, another reason there would be no funding — was only a purchase, by “investors” of collection rights.
Much we do not know — no one can speculate — but keep getting closer to the truth.
Know as someone else here pointed out — “it is not just about the house — it is about justice.”
No deals until all cards are on the table.
neidermeyer,
Too busy eating.
Prices will continue to drop ,, there is an oversupply of inventory and weak employment and income numbers… and nothing on the horizon to skew the balance towards price increases.
I keep trying to educate people on the forums I hang out at ,, the awareness level is increasing but there are a lot of people who won’t really get it for many years to come..
The general public has NO CLUE this mess .. none!
Unless they have had a foreclosure jammed down their throats MR john public has no desire to lift his head from the daily drudgery except to change the channel. “i doesn’t effect me” so I’d rather watch something to eat!
Ian,
As if you are driving down a country road late night, the common response is nothing more than like a ” Deer in the Headlights”
Wall Street and there gang of banksters ran over millions and this government has done nothing but watch the dead carcass rot within the drainage ditch.
Good points ian. However, in my opinion there are more people with awareness now than there were 1, 2 or 3 years ago. We are making progress, but very slowly.
Neil- whenever anyone I know in the R.E. sphere, such as realtors, builders, masons, deck builders, title agents etc. complain about how bad the real estate business is, my canned response is; “well, you have to remember, that all the money which fueled the building boom was basically stolen from investors and governments around the world, I don’t think it is going to come back anytime soon.” Comments such as this are usually met with blank stares. Additionally, most Americans still believe that the current state of the economy was brought on by deadbeats not paying their mortgages. I spoke with 7 or 8 attorneys last year about securitized mortgages and foreclosure fraud, asking generic questions and gently prying as to their awareness of what is happening- there isn’t any awareness. 0 of 8 knew anything. What to do.