Bloomberg: Housing Prices Continue to Plunge

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EDITOR’S COMMENT: Somebody once said that after Americans have exhausted all other options they will finally  do the right thing. I hope that is true. Because until we start treating homeowners as victims instead of deadbeats, the situation cannot change. And until we consider the interest of investors to be far more important than the appearance of financial stability in banks that are holding fictitious assets, confidence in our financial markets and the willingness  to invest in American markets will be diminished.

I don’t know about you, but if I knew that the economy would return to health by giving somebody money or property or any other sort of benefit I would be hard-pressed to say no and allow more people to lose their homes, their dignity and their hopes. We tried giving everything we had to the banks. It’s time to look in other directions.

Home Prices in 20 U.S. Cities Decline 4%

By Shobhana Chandra

Home prices in 20 U.S. cities dropped more than forecast in December to the lowest level since the housing crisis began in mid-2006, indicating foreclosures are hampering the industry’s recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 4 percent from a year earlier, after decreasing 3.9 percent in November, a report from the group showed today in New York. The median forecast of 31 economists surveyed by Bloomberg News called for a 3.7 percent decline.

Abandoned houses at the Desert Mesa subdivision in North Las Vegas. Photographer: Jewel Samad /AFP/Getty Images

Feb. 28 (Bloomberg) — Robert Shiller and Karl Case, co-creators of the S&P/Case-Shiller index of property values in 20 U.S. cities, talks about the housing market and home prices. The S&P/Case-Shiller index fell 4 percent in December, more than forecast, to the lowest level since the housing crisis began in mid-2006. Shiller and Case speak with Tom Keene on Bloomberg Radio’s “Surveillance.” (Source: Bloomberg)

Feb. 22 (Bloomberg) — Douglas Yearley, chief executive officer of Toll Brothers Inc., talks about the outlook for the U.S. housing market. Yearly also discusses Toll Brothers’ first-quarter earnings and the Obama administration’s efforts to stimulate the housing market. He speaks with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Feb. 28 (Bloomberg) — Home prices in 20 U.S. cities dropped more than forecast in December to the lowest level since the housing crisis began in mid-2006, indicating foreclosures are hampering the industry’s recovery. The S&P/Case-Shiller index of property values in 20 cities fell 4 percent from a year earlier, after decreasing 3.9 percent in November, a report from the group showed today in New York. Betty Liu reports on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

Signage for the Toll Brothers Inc. Diablo Estates is displayed at the entrance of a development in Clayton, California. Photographer: David Paul Morris/Bloomberg

Distressed properties returning to the market mean prices will stay depressed, prompting buyers to wait for cheaper bargains and impeding construction. While sales have begun to stabilize, a rebound in home values may take time, underscoring Federal Reserve policy makers’ concern that weakness in housing is blunting their efforts to spur the economic expansion.

“We’re still dealing with a lot of distressed properties and very low absolute levels of demand,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who accurately projected the 4 percent drop. “We’re not seeing any of the stabilization in housing activity filter through to prices.”

A separate report today from the Commerce Department showed orders for U.S. durable goods fell in January by the most in three years, led by a slowdown in demand for commercial aircraft and business equipment.

Three Years

Bookings for goods meant to last at least three years slumped 4 percent, more than forecast, after a revised 3.2 percent gain the prior month. Economists projected a 1 percent decline, according to the median forecast in a Bloomberg News survey.

The Standard & Poor’s 500 Index was little changed at 1,367.54 at 9:34 a.m. in New York. The 10-year Treasury yield fell two basis points from late yesterday to 1.90 percent.

Economists’ estimates for the year-over-year change in the home price index for December ranged from declines of 4.1 percent to 3.2 percent, according to the survey. The Case- Shiller index is based on a three-month average, which means the December data was influenced by transactions in October and November.

The November reading was previously reported as a year- over-year drop of 3.7 percent.

Home prices adjusted for seasonal variations fell 0.5 percent in December from the prior month, following a decrease of 0.7 percent in November. Unadjusted prices fell 1.1 percent from the prior month.

Shows Trends

The year-over-year gauge, begun in 2001, provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Nineteen of the 20 cities in the index showed a year-over- year decline, led by a 12.8 percent drop in Atlanta. Detroit showed the only increase, with prices rising 0.5 percent in December.

Nationally, prices decreased 4 percent in the fourth quarter from the same time in 2010 to the lowest level since mid-2006. They fell 3.8 percent from the previous three months before seasonal adjustment, and fell 1.7 percent after taking those changes into account.

“The pickup in the economy has simply not been strong enough to keep home prices stabilized,” David Blitzer, chairman of the S&P index committee, said in a statement. “If anything, it looks like we might have re-entered a period of decline as we begin 2012.”

Demand Steadies

Recent reports indicate demand is steadying. Existing-home (ETSLTOTL) sales rose to a 4.57 million annual rate in January, the National Association of Realtors reported last week. While it was the best showing since May 2010, distressed properties made up the largest portion of all purchases since April.

Toll Brothers Inc. (TOL) and D.R. Horton Inc. are among builders benefiting from job growth as well as cheaper properties and record-low mortgage rates.

“We’re optimistic,” Doug Yearley, chief executive officer at Horsham, Pennsylvania-based Toll Brothers, said in a Feb. 22 interview with Bloomberg Television. “We have orders that are up significantly. We’re seeing deposits up, we’re seeing traffic up.”

Excess supply of distressed properties is dragging down values for all houses. About 5 million houses have been lost to foreclosure in the U.S. since 2006, according to RealtyTrac Inc. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent homeowners in 2011, it said last month.

“Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery,” Fed Chairman Ben S. Bernanke said in the cover letter of a Fed study on the housing market that he sent to Congress last month.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

 

9 Responses

  1. Why would anyone want to get into the housing market with all the rampant fraud going on? How are they going to sell foreclosed houses without the real paperwork? How will you know if the REAL owner of the property will reapear to claim what is rightfully his or hers? This will go on and on till someone goes to jail over this massive fraud and retistibution of weath. I guess they didn’t think this all the way through
    because from what I’ve been reading we should be getting ready for the the next housing shock. Just because the markets are doing alittle better doesn’t mean we are out of the wood yet!!!!!

  2. The big news is the commercial real estate … Shopping Malls have some pretty substantial overhead .. There are at least 7 in my area and 4 are “walking dead” with vacancy rates over 15% by square footage and another 10-20% of the space rented by very weak stores with minimal cash flow that cannot be contributing to the operators bottom line …(a typical mall lease has you paying $$$$ plus a percentage of your gross) …

    I can drive around my city and spot empty class “A” office space at will … this will all deteriorate to nothing in a few years and will depress the rents at the “good” buildings forever…

  3. Banks Steal Homes, and I have PROOF

    Posted on February 28th, 2012 by Mark Stopa

    The name “Danielle Sterling” may not mean much to you. Frankly, it shouldn’t. Danielle Sterling was a receptionist for American Home Mortgage until 2005, when she was promoted to a “Collateral Reviewer,” a position she held until 2007, when American Home Mortgage went out of business. I don’t want to call her a “nobody,” but Danielle Sterling was just one step up from a receptionist at a mortgage company that’s been out of business for five years … clearly she was a bit player in the mortgage industry. So why am I talking about her?

    Well, I defend foreclosure cases. In that role, I look closely at every promissory note and every indorsement on those notes that come across my desk. I’ve encountered the name “Danielle Sterling” a fair number of times as an indorser on Notes. Frankly, I didn’t think much of it at the time – it was just a scribbled signature on a Note. However, when I came to learn she was just one step up from a receptionist, and she hasn’t been in the industry since 2007, it made me wonder … “why is Danielle Sterling signing so many indorsements on promissory notes, transferring millions of dollars?” If you ran a business, can you imagine giving low-level staff members the authority to transfer millions of dollars in commercial paper with a swipe of the pen? What in the name of Wells Fargo is going on here?

    With the help of my friend Matt Weidner, it seems I have an answer. According to this Affidavit,http://www.stayinmyhome.com/blog/wp-content/uploads/2012/02/Sterling-Affidavit.pdf Danielle Sterling did not endorse a promissory note entered by Daniel and Christine Hunk. Ms. Sterling is very unequivocal about this – she never endorsed the Note. Yet the Note has an endorsement bearing her signature.

    Let’s say that again …

    Danielle Sterling did not endorse the Note, but the Note has an endorsement with her signature.

    I may not be a rocket scientist, but it doesn’t take Sherlock Holmes to figure out what happened here. A bank (apparently Citimortgage, since it was the plaintiff) wanted to foreclose on the Note and Mortgage entered by Daniel and Christine Hunk, but needed an endorsement from American Home Mortgage. But American Home Mortgage was out of business. So Citimortgage took the endorsement stamp that had been used by Danielle Sterling (from when she worked at American Home Mortgage), stamped it on the Note, and forged her signature.

    What’s the result? If you look at the endorsement, everything looks normal. It looks like the endorsements we all see on tens of thousands of notes in foreclosure cases throughout Florida. But there’s the rub …

    the endorsement looks normal, but it’s a forgery.

    For anyone who thinks this is “no big deal” or merely “sloppy paperwork, bear this in mind. Foreclosure cases turn on endorsements like this. Having a Note, endorsed in blank (or specially indorsed to the plaintiff) is almost always what a foreclosure plaintiff asserts as its standing to foreclose. In other words, endorsements like this are what gives the bank the right to foreclose on a homeowner. With an endorsement, the bank is probably going to win (and foreclose). Without it, they’re probably going to lose. Hence, if these endorsements are forged, as this one clearly seems to be, then banks are, quite literally, stealing homes that don’t belong to them.

    Everyone needs to take a moment and reflect on the magnitude of this situation. As you do, bear in mind – most judges I know accept an original Note with an endorsement as gospel. If homeowners and foreclosure defense attorneys have a legitimate reason to question the authenticity of the endorsements that appear on Notes in foreclosure cases – as we clearly do in light of this affidavit – then where does that leave us? In my view, courts cannot take an endorsement at face value. They just can’t. There’s a legitimate reason to question the veracity of every endorsement, not just by Danielle Sterling, but every endorsement. After all, if we’ve proven Danielle Sterline endorsements are forged, do you really think that’s the only one? I sure don’t.

    And what about the legislature? How on earth can anyone – ANYONE – justify new legislation to “push through” foreclosure cases quicker in light of evidence like this? Ahhh, I forgot. Florida is full of deadbeat homeowners, and even though we’re experiencing the biggest fraud in the history of mankind, we all need to sweep it under the rug to improve the economy. Because throwing homeowners on the streets for the benefit of banks that committed widespread fraud will help. Right.

    If this isn’t a wake-up call for all of America, then nothing is. Foreclosures are littered with fraud … billions of dollars in wealth are changing hands in fraudulent ways … does anyone care?

    Can you imagine if I posted on this blog some sort of proof that I had endorsed a check payable to Bank of America over to myself, then cashed it? I’d be in jail tomorrow and news stories would run about how a foreclosure defense attorney was arrested for theft. But when a bank does it, nobody cares.

    By the way, compare Danielle Sterling’s signature on the affidavit to the signature on the endorsement. The two signatures aren’t even close. Frankly, that’s offensive. I mean, if you’re going to forge something, at least forge it well. Here, the banks were so callous about their fraud they didn’t even try to make it a good forgery – they just scribbled something on an endorsement and use that forged endorsement as a basis for standing. And like I said in the beginning of this post, I have many cases with endorsements by Danielle Sterling.

    But the issue here isn’t Danielle Sterling. The issue here is that it’s time for everyone to stop treating an original note with an endorsement as gospel. Clearly, endorsement fraud is pervasive in the foreclosure industry, and it’s about time we all put a stop to it.
    Mark Stopa Esq.

    http://www.stayinmyhome.com
    See more comments at http://www.stayinmyhome.com/blog/2012/02/banks-steal-homes-and-i-have-proof/

  4. BERNANKE REPORT TO CONGRESS ON MONETARY POLICY 2-2-2012

    http://www.scribd.com/doc/83235965/2-29-2012-Monetary-Policy-Report-to-the-Congress-Bernanke

  5. @A. Machi,

    That’s one of the things I find interesting. Isn’t there a limit to how much interest can be charged, short of usury?

    http://www.loanback.com/category/usury-laws-by-state/

    It seems to me that anything above 10 or 12% is government-backed organized loan sharking. What I can’t fathom is why, nowadays, people would still bind themselves into such a contract. I, for one, closed all my accounts when trying to close my Macy’s account ended up being a horrible ordeal that took almost 2 years! Once you have gotten suckered into it, it is nearly impossible to get out. And God knows I always paid it off but the mistakes were almost contant on that account. And people have no clue that you can’t fight against them. Everything is subject to arbitration. Some people lost everything after submitting to such arbitrations (99.99% in favor of the financial company since arbitrators wortk for them).

    Credit is a bad plan all around. Cash and carry is still the best.

  6. Giving people stuff WILL NOT help the economy. Reducing interest rate charges WILL. Interest rate charges are a reward given to the wealthy when that money spawns profitable growth for all.

    When the economy is in a guarded, non-growth situation, then interest rates need to be cut, both on mortgages AND on credit card debt and student interest rate loans.

    Target charges 22.90% interest on their credit cards. People who can just afford to make the minimum payment are actually paying 60% towards this interest rate charge EACH AND EVERY MONTH.

    Target appears to be into the loan sharking business moreso than into actually helping their customers and producers of their products do business.

  7. 101 Resignations From World Banks and Counting (Updated List Feb. 29th, 2012)

    http://www.thehealersjournal.com/2012/02/29/101-resignations-from-world-banks-and-counting-updated-list-feb-29th-2012/

    I know… that site isn’t the Washington Post or the NY Post but. since our media seem to ignore the massive resignations (12 more as of 2/28/12), I’ll keep on posting them here.

    To me, it’s a really, really good sign. And I will keep on taking that way until proven otherwise.

  8. Not surprising… As long as the culprits are not brought to justice and a nationwide moratorium is not declared, why should people keep on paying?

    There is a new business in town… Got three different letters in the past couple of days, from LLCs telling me that my house has been grossly overassessed for real estate tax purposes. I knew that: I filed a request for reassessment last year and the assessor came back with… a value even higher than originally calculated!

    In any event, the new game is that, for anywhere between $100 and $250 (depending on which company wrote to you), they file an appeal to lower your real estate taxes. One letter came from AZ, one from WV and today’s is from WA…

    Smell like another new-and-improved con. If I were to appeal, I wouldn’t use an out-of-state entity to help me. And I wouldn’t pay anyone anyway. I wonder how many people are going to fall for that. Amazing what people will invent to make a few bucks!

  9. and they will continue to decline….its not hard to understand

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