Home prices falling faster - down 17% in February
indiaBPOking
James Temple, Chronicle Staff Writer
Wednesday, April 30, 2008
Low-priced homes led plunge. Chronicle Graphic The U.S. housing slump,
as reflected by these signs on a ...
(04-29) 10:11 PDT SAN FRANCISCO -- Like a brick falling from the top
of the Transamerica Pyramid, national and local home prices are
rapidly accelerating on their way down, crushing hopes of an imminent
turnaround.
The cost of a typical Bay Area home plunged 17.2 percent year-over-
year in February, compared with 13.2 percent in January and 10.8 in
December, according to an index of real estate values published by New
York credit rating agency Standard & Poor's. Across the nation, the
S&P/Case-Shiller 10-City Composite index covering major U.S. markets
followed a similar trajectory, falling 13.6 percent in February, 11.4
percent in January and 9.8 percent in December. On a month-over-month
basis, the national numbers have fallen or stayed the same for at
least the last six months.
The indexes represent the overall price trend in specific metropolitan
areas. Many of the cities or neighborhoods within these regions
performed far better or far worse. San Francisco, for instance, eked
out a median price increase in March, but the rare positive examples
were more than offset by the tumbling values in outlying areas, like
eastern Contra Costa County.
Decreases tend to slow before stopping, so the quickening pace of
these broader price declines suggests the bottom of the market remains
far off, industry observers say.
"Prices have a lot of room to fall," said Patrick Newport, an
economist with Waltham, Mass., research firm Global Insight Inc. "We
could see some really big drops."
Further decline expected
Coupled with a Census Bureau report on Sunday that found the inventory
of vacant and for-sale homes rose to an all-time record of 2.9
percent, the S&P/Case-Shiller study means U.S. home values will
decline by at least an additional 10 percent and possibly by much
more, Newport said.
It's a stark assessment for a housing market that already has been
unraveling for two years, sending national and local prices down 16
percent and 25 percent from their peaks so far. The slowdown morphed
into a meltdown last summer as resetting mortgages and falling home
values brought waves of defaults and foreclosures and an international
liquidity crisis.
Seventeen of the 20 major metropolitan areas tracked by S&P/ Case-
Shiller posted the biggest annual declines in at least 18 years, as
far back as the data goes. Las Vegas, Miami and Phoenix reported the
steepest drops, 22.8 percent, 21.7 percent and 20.8 percent,
respectively.
The San Francisco region, which includes Alameda, Contra Costa, Marin,
San Francisco and San Mateo counties, saw the sixth highest annual
drop and the biggest month-over-month decline, 5 percent.
Connection to other areas
Stephen Levy, senior economist at the Center for Continuing Study of
the California Economy in Palo Alto, said the early, enormous price
declines in areas like Stockton and Fresno are filtering into the Bay
Area.
"Even though we don't have the high foreclosure rates, housing is a
market and prices here are connected to prices in adjoining areas," he
said.
Another major factor driving down local prices is financing, he said.
Tightening lending standards and larger required down payments are
inhibiting people's ability to afford the region's high-priced homes.
Michael Carney, director of the Real Estate Research Council of
Northern California, said he was "shocked" that the Bay Area number
fell as far as it did, but echoed Newport in saying the accelerating
decline means the worst is to come.
The regional trend is skewed by the outer areas, such as Antioch and
Pittsburg, where there are high levels of foreclosures and prices
declining by as much as 25 percent, said Ken Rosen, chairman of the
Fisher Center for Real Estate and Urban Economics at UC Berkeley.
Prices in the core of the Bay Area, including San Francisco, Silicon
Valley and Marin, are down 6 percent at most, he said.
Examples of variation
S&P/Case-Shiller does acknowledge this variation, noting that low-
priced homes, which saw the biggest run-up since 2000 and tend to be
located in the exurbs, have fared the worst in the downturn.
Properties priced below $513,218 plummeted about 33 percent since
February 2006. In contrast, medium-priced houses, between $513,218 and
$756,420, declined 22 percent while high-priced homes, above $756,420,
fell just 6.8 percent.
"The low-price homes tend to be where there's more speculation and
dubious mortgages," said David Blitzer, chairman of Standard & Poor's
index committee. "The farther they went up, the harder they fell."
S&P/Case-Shiller assigned each metropolitan area it tracks a base
value of 100 as of January 2000. That figure fluctuates with market
value, so an index of 150 translates to 50 percent real dollar price
appreciation.
The San Francisco index was at 174.54 in February, meaning despite the
recent turmoil, values are up nearly 75 percent from eight years ago.
Many real estate experts consider the S&P/Case-Shiller indexes and
others like them more accurate gauges of real estate trends than the
median price approach used by other groups. Because they track the
value only of homes that have traded hands at least twice, the indexes
chart the actual increase or decrease in specific homes. Median
surveys compare prices for homes sold in one month to an entirely
different set sold in the next, meaning they can be artificially
distorted when a higher proportion of homes sell in the lower- or
higher-priced tier in a given period.
Stray Dog
always loves to talk about the negatives of the US economy without
acknowledging the positives. So lets just look at a few. WSJ, May 9,
2008, page A2: "US Jobless Claims Fell in Latest Week" (not that I'm
that impressed with govt stats, but this is anything but a crashing
economy). Front page and more on page A2 about inflation: Half of
economists in poll say that inflation is being driven by demand from
China/India (so all you guys can blame China and India for all of the
world's inflation woes, and those woes are amplified in another
article on page A9: "Inflation Concerns Keep Europe's Rates on Hold"
and the graphic shows inflation all over Asia two to three times
higher than US, Euro, and Japan. Now, lets look on page B2: "U.S.
Retail Sales Rose in April" *yeah, last month, sales went higher. Sure
does not look like a crashing economy to me (BPOking and "ather" and
others who can't see the forest for the trees, probably can't think,
either). Now lets look on page C2 and first page of "C" section for
the headline "The financial crisis is '75-85% done,' says Dimon of
J.P. Morgan Chase" (sure does not look like an economy in a crash to
me). Also on page C1 is this article "Trade Deficit May Extend Its
Shrinking" and the graphic shows the monthly trade deficit for the
last 1-2 years going down, long term. Sure does not look like a
crashing economy to me.
So, why are these guys dancing in the streets over a small number of
relatively minor problems in the US and totally ignoring the positive
news? Are they mentally unbalanced? Or, incompetant? Or, just backing
up their prejudice and bias with propaganda?
================
On May 10, 5:59 pm, indiaBPOking <indiabpok...@yahoo.com> wrote:
> http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/29/MNK810DNI...
Jeff Strickland
"Stray Dog" <strayd...@gmail.com> wrote in message
news:02cb8ae6-2257-4468...@u6g2000prc.googlegroups.com...
They're Democrats, and Democrats need a faltering economy to win in
November. They call it good bad news.
Bad good news is when the WSJ reports an up month in April, or lower than
expected job losses, or that the economic troubles are actually caused by
policy matters elsewhere in the world. That is all good news for America,
but bad news for Democrats.
The Trucker
Republican economic ideology was and is hopelessly flawed. But they
really do believe that economics does not matter. There are 3 things that
are important to Republicans: Authority, authority, and authority.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
End the Occupation NOW
with Microsoft in Bangalore. "One year in this city, and I can't take it any
more!"
"Working night shifts at a call center fielding customer-service calls from
the U.S. isn't conducive to physical or psychological health, no matter how
good the money. Experts at the Bangalore-based National Institute of Mental
Health and Neuro Sciences (NIMHANS) have been warning that an increasing
number of young professionals, including IT sector workers, are reporting
psychological problems."
http://www.time.com/time/business/article/0,8599,1737872,00.html
Stray Dog
> On Sat, 10 May 2008 16:07:33 -0700 (PDT), Stray Dog
>
> <straydog2...@gmail.com> wrote:
> >So, why are these guys dancing in the streets over a small number of
> >relatively minor problems in the US
>
From my recollection of material covered in the WSJ over more than 20
years, the Enron-Andersen-etc problem was the worst I ever saw.
People are asking if this recession is going to
> be more like the 230s or the 70s. Neither of those choices is small
> potatoes.and totally ignoring the positive
When I can read across a range of content in the media, including
business media, and there is a mixture of good and bad news that is
about equal, then we are not headed into a major disaster.
And, I quoted from one issue of WSJ several examples.
> The trade deficit is down because we're buying less oil at these
> exorbitant prices and the recession sees us buying less.
You forgot two specific items: i) exports are up and rising, and ii)
tourism _to_ the USA is up significantly.
It's a sign
> of bad things. Not good. Read.
I probably read more than you do.
Stray Dog
> "Stray Dog" <straydog2...@gmail.com> wrote in message
I don't favor either party...they are all a bunch of crooks.
Stray Dog
> On Sun, 11 May 2008 01:21:15 +0000, Jeff Strickland wrote:
>
> >news:02cb8ae6-2257-4468...@u6g2000prc.googlegroups.com...
> >> (BPOking's post is quoted in full at the end of my
deleted
> > They're Democrats, and Democrats need a faltering economy to win in
> > November. They call it good bad news.
>
> > Bad good news is when the WSJ reports an up month in April, or lower than
> > expected job losses, or that the economic troubles are actually caused by
> > policy matters elsewhere in the world. That is all good news for America,
> > but bad news for Democrats.
>
> Republican economic ideology was and is hopelessly flawed. But they
> really do believe that economics does not matter. There are 3 things that
> are important to Republicans: Authority, authority, and authority.
Well, my big notion about the Republicans is that: i) they consider
DoE, DoD government spending is really not government spending (or, in
other words, those are sacred cows) and all other government spending
needs to be cut to zero (except the paychecks for Republicans
politicians), and ii) all we need to do is make rich people happy
(i.e. richer) and everything else will sort itself out (with or
without trickle-down, preferably without).
(pardon my slight bias)
The Trucker
The Trucker
> On May 11, 12:25 am, The Trucker <mik...@verizon.net> wrote:
>> On Sun, 11 May 2008 01:21:15 +0000, Jeff Strickland wrote:
>>
>> > "Stray Dog" <straydog2...@gmail.com> wrote in message
>> >news:02cb8ae6-2257-4468...@u6g2000prc.googlegroups.com...
>> >> (BPOking's post is quoted in full at the end of my
>
> deleted
>
>> > They're Democrats, and Democrats need a faltering economy to win in
>> > November. They call it good bad news.
>>
>> > Bad good news is when the WSJ reports an up month in April, or lower than
>> > expected job losses, or that the economic troubles are actually caused by
>> > policy matters elsewhere in the world. That is all good news for America,
>> > but bad news for Democrats.
>>
>> Republican economic ideology was and is hopelessly flawed. But they
>> really do believe that economics does not matter. There are 3 things that
>> are important to Republicans: Authority, authority, and authority.
>
> Well, my big notion about the Republicans is that: i) they consider
> DoE, DoD government spending is really not government spending (or, in
> other words, those are sacred cows) and all other government spending
> needs to be cut to zero (except the paychecks for Republicans
> politicians), and ii) all we need to do is make rich people happy
> (i.e. richer) and everything else will sort itself out (with or
> without trickle-down, preferably without).
>
> (pardon my slight bias)
That seems a reasonably correct assessment. However: It only takes a
modicum of knowledge concerning economies of scale to totally refute that
position. The real claim is that government is inherently less efficient
than is the private sector. This may even be true (probably is true) in
the current government. Many of us, and probably most of us, see it
really as a problem of transparency and accountability. Large
organizations all tend to be less transparent. The private firms are
even less transparent than government but government is currently less
accountable. The proper thing to do is to make government more
accountable by improving the representative nature at the bottom -- in the
House of Representatives.
"A government is republican in proportion as every member composing it has
his equal voice in the direction of its concerns: not indeed in person,
which would be impracticable beyond the limits of a city or small
township, but by representatives chosen by himself and responsible to him
at short periods." --Thomas Jefferson to Samuel Kercheval, 1816.
http://GreaterVoice.org/extend
The Trucker
The Libertarian/Austrian/Neoclassical position is
that by staying out of the way of the greedy you allow them to "develop"
all the resources in a manner that provides lollipops to the society and
that lollipops are good because people want lollipops.
Other "economists" conclude that Malthus was inevitably correct: There
are limits to this "development" past which it is counterproductive or, at
least, unproductive. And neither of these aggregate theories say anything
about distribution of the lollipops.
And it is the latter concern (the distribution) where the ideology of the
two American political parties is predominant. The development or
preservation of a caste society has always been the hallmark of the
Republicans. They are convinced that the nobility (in league with
the church) should direct the morality of the society and they will
constantly fight against such notions as democracy and populism. For
them, the caste system is the important factor above all else (leadership,
nationalism, religious orthodoxy, "the fight against
eeeeeeeevvviiiiilll"). Trickle down economics (a total farce as far as
equal opportunity and utility maximization) is merely a reflection of the
goals sought by the Republicans.
The Democrats OTOH were historically the party of democracy. They are
today still more democratic than are the latter day republicans. They
have historically promoted the idea that the common people should have
sufficient control to prevent despotism. Democracy will inevitably take on
the appearance of socialism in that strong government is necessary to the
prevention of the caste system or the control of it. But the "party"
system itself raises a "nobility". And the latter day Democratic party
has become rudderless and farcical due to their supposed need for
solidarity in the face of the Republicans. Such lock stepped organization
is unnecessary to the realization of representative government. And it
deserves the label of "leftist" in that it is control by "the central
committee".
http://GreaterVoice.org/extend
Any, so called, democrat that is not actively promoting the expansion of
the membership of the House of Representatives is a Republican dressed in
a Democrat suit.
Jeff Strickland
The number of homes sold in April was up for the 4th straight month. The
median price continues to fall, but the volume of sales is up, and many
sales have multiple offers that result in the occasional sale taking place
at a point or two above the asking price.
Granted, there are many other factors to look at, but if the volume is
picking up then the slide in prices has to be near the end.
</top post>
"indiaBPOking" <indiab...@yahoo.com> wrote in message
news:696b4b4d-36d1-425b...@k1g2000prb.googlegroups.com...
Jeff Strickland
<retro...@comcast.net> wrote in message
news:k2ae24d9q78d0usg0...@4ax.com...
> On Sun, 11 May 2008 16:00:03 GMT, "Jeff Strickland"
> <cr...@verizon.net> wrote:
>
>>IN MY PAPER TODAY ...
>>
>>The number of homes sold in April was up for the 4th straight month. The
>>median price continues to fall, but the volume of sales is up, and many
>>sales have multiple offers that result in the occasional sale taking place
>>at a point or two above the asking price.
>
> favorite of these rah rah rags and economic boosters to post seasonal
> variations as signs of "recovery". Thus yeah over four months sales
> are up. But November sales are always lower than April sales. But
> match the year over year by month and it's a very different story.
>
> You're in the Boston area?
>
No, I not in Boston.
They are matching year over year sales of the same month a year ago. April
and the preceeding three months have posted higher sales than Arpil and each
of the preceeding three months one year ago. That's what the Multiple
Listing Service shows.
This ONLY looks at the number of sales, other factors include the falling
median price and the number of foreclosures persisiting or increasing.
If they sold the same number of houses in my area at the pace of April sales
and there were no new foreclosures, there would be an 8 month supply of
houses to clear out. The picture is far from rosy, but it doesn't suck quite
so badly either.
Stray Dog
> On Sun, 11 May 2008 20:13:20 GMT, "Jeff Strickland"
>
>
>
> <cr...@verizon.net> wrote:
>
> ><retrogro...@comcast.net> wrote in message
> >news:k2ae24d9q78d0usg0...@4ax.com...
> >> On Sun, 11 May 2008 16:00:03 GMT, "Jeff Strickland"
> >> <cr...@verizon.net> wrote:
>
> >>>IN MY PAPER TODAY ...
>
> >>>The number of homes sold in April was up for the 4th straight month. The
> >>>median price continues to fall, but the volume of sales is up, and many
> >>>sales have multiple offers that result in the occasional sale taking place
> >>>at a point or two above the asking price.
>
> >> You're being duped. Look at the year over year figures. It's a
> >> favorite of these rah rah rags and economic boosters to post seasonal
> >> variations as signs of "recovery". Thus yeah over four months sales
> >> are up. But November sales are always lower than April sales. But
> >> match the year over year by month and it's a very different story.
>
> >> You're in the Boston area?
>
> >No, I not in Boston.
>
> >They are matching year over year sales of the same month a year ago.
>
>
> >April
> >and the preceeding three months have posted higher sales than Arpil and each
> >of the preceeding three months one year ago. That's what the Multiple
> >Listing Service shows.
>
> >This ONLY looks at the number of sales, other factors include the falling
> >median price and the number of foreclosures persisiting or increasing.
>
> >If they sold the same number of houses in my area at the pace of April sales
> >and there were no new foreclosures, there would be an 8 month supply of
> >houses to clear out. The picture is far from rosy, but it doesn't suck quite
> >so badly either.
>
> national figures don't look near that rosey yet and are showing 20%
> year over year declines.http://www.philly.com/philly/business/breaking/18740174.html
Look, you guys can argue a lot about a few articles in the newspapers
about home sales/price stats and, yes, the guys putting out the stats
are always spinning them at leaat a little, and the guys in control of
the media are spinning, too. But, look at the whole economy. World
and particularly Asia is headed for bigger inflation by quite a bit
(their poor are going to suffer more), and the number one indicators
for the US economy are going to be overall sales figures and
unemployment. My view is that you pay attention to how this plays out
over the rest of the year before throwing your hands up in the air.
Now, the other problem is all this offshoring of US jobs to 3rd world
countries (where the poor are still very poor and also getting poorer,
and the currencies are still cheap). And, while that offshoring is
going on, the "boss" (CEOs, etc) back here is getting the work done
for you at the same high rates, but his costs are going down and his
paycheck getting bigger. eg. WSJ story back a few years ago that
Andersen accounting was shipping CPA work to Puerto Rico at $12/hour
and charging the US clients something like $110/hour. Pretty good
markup, eh? I'd love to be the middleman.
Ship the work over to India, get another couple bucks an hour for the
"clerk" back onshore and couple bucks more for the CEO. Multiply by
thousands, and all of a sudden, that's where US prosperity is at: CEO
wallets.
Jeff Strickland
<retro...@comcast.net> wrote in message
news:jfme241j4fl2ibag2...@4ax.com...
>>
>>They are matching year over year sales of the same month a year ago.
>
>
Here's the article ...
<quote>
While most of the nation appears mired in the middle of a severe housing
slump, the southwest corner of Riverside County may be showing signs of
recovery.
In April, the number of houses sold was higher than the year before for the
fourth straight month, leaping 73 percent last month from a year ago.
And, for the first time since the housing market took a dive, house sales in
the Temecula-Murrieta region were higher than sales in 2006, near the peak
of the housing boom.
To be sure, not all housing data in Southwest Riverside point to recovery.
Some prominent housing analysts think the region's housing recession is far
from over, chiefly because foreclosures have doubled from a year ago, and an
oversupply of homes for sale threatens to further depress prices.
Yet sellers have already been slashing prices, setting the stage for the
recent surge in buying.
The median home price ---- in which half the homes sell for more and half
for less ---- in the region sank to $265,000 in April, a mammoth 36 percent
off the $415,000 median in 2007 and 40 percent below the $439,900 level of
2006, according to an analysis by The Californian and North County Times of
data from the Multi-Regional Multiple Listing Service.
Escalating home sales, widely considered an indicator of an incipient
housing market recovery, have encouraged some analysts to predict that price
declines will soon cease in the region.
Meanwhile, North San Diego County's housing market is not showing similar
signs of recovery. Its median price has fallen about 25 percent from its
peak to $490,000, but house sales for the last 28 months have been lower
than the same month the year before, according to a monthly real estate
association report.
Southwest Riverside's data had enough strong points for at least one real
estate agent to warn clients that the region's housing market will soon see
prices rise.
"For example, I have a couple in their late 40s. They have never owned a
home and have always rented," said Barbara Baker, a real estate agent in
Murrieta. "And I told them, 'If you don't do it (buy a home) now, you'll
always be a renter.'"
Baker said she thinks the low point in prices is near because she
consistently sees multiple offers on houses for sale, driving the sales
price above the asking price.
However, plenty of other data point away from an immediate recovery.
The region's housing market is still bloated with large inventory; it would
take about eight months to sell off all homes on the market at the sales
pace seen in April.
Many housing analysts think an inventory higher than a six-month supply puts
downward pressure on prices.
And foreclosures keep rising: Notices of default, the first step in the
foreclosure process, in Southwest Riverside doubled from a year ago to 3,700
during the first quarter, according to ForeclosureRadar, a tracking service.
A booming increase in the number of notices of default suggests more
bank-owned homes over the next six months, which tend to depress prices,
analysts said.
"There's no bottom in sight," said Christopher Thornberg, an economist with
Beacon Economics. "There's nothing more pernicious to prices than supply,
and what you have building up right now is a massive amount of foreclosures.
And nobody is more motivated to sell than banks."
Thornberg said he thought home prices in the Inland Empire could fall as
much as 55 percent from the peak, which would mean an additional 20 percent
drop in Southwest Riverside, sending the median to $200,000.
Thornberg's argument is underpinned by income levels that suggest many
homeowners cannot afford the typical mortgage payment.
If affordability is used as the sole predictor of home prices, then
Southwest Riverside County appears to be closer to ending its price decline
while San Diego County, and North County particularly, could continue to see
steep price drops.
In 1996, San Diego County's housing market began to recover from a recession
after the typical mortgage payment (using the median home price with the
average interest rate) fell to 20 percent below one-third of the median
household income, according to data from DataQuick Information Systems and
the U.S. Census.
That means the typical mortgage cost about $1,200 a month while the typical
household earned about $4,500 a month in inflation-adjusted dollars.
The typical mortgage payment in Southwest Riverside County is now 15 percent
below one-third of the county's median income, considered by many housing
advocates as the recommended portion of income that should be spent on
housing costs.
In contrast, the typical mortgage payment in North County is about 40
percent higher than the one-third level, based on the median household
income in the county.
For George Farraye, it was Southwest Riverside County's falling prices that
spurred him to buy. He bought a home in Murrieta earlier this month at a 43
percent discount off its previous sales price.
"This housing market is unbelievable," he said. "There are some real dumps,
and there are some real great buys. And I think we got a great buy ---- we
got it for less than $100 a square foot, and we're in a gated community."
Though foreclosures and inventory were still high in Southwest Riverside,
some analysts look to the number of sales as a harbinger of price.
April house sales rocketed from 2007, leaping 72.5 percent from 346 to 597
sales of houses last month.
However, home sales were well below a peak for the month of April of 786
homes sold in 2004.
Most of the houses selling were on the lower end: 75 percent of the 597
homes sold last month went for $350,000 or less. Just 24 percent of the 346
homes sold in the same month a year earlier were under $350,000.
Gene Wunderlich, a real estate broker in Wildomar, said he is not quite
ready to predict a bounce in prices. But even if prices tick down, he said,
a rise in interest rates could wipe out any savings in sales price.
"It's not so much if you don't jump in now you'll be priced out. But you
have to weigh the opportunity costs," he said. "Say you wait another year
and prices do go down another 10 percent and interest rates go up ... your
monthly payments could be higher than they would be now."
Average interest rates nationally were at a historically low 5.9 percent a
week ago, according to the latest survey by the Mortgage Bankers
Association.
If the region's median home price fell an additional 10 percent, yet
interest rates were to rise a single percentage point, the combination would
yield a similar mortgage payment to today's typical bill. The scenario would
put interest rates at 7 percent, the highest level since March 2002,
according to the bankers association.
Contact staff writer Zach Fox at (760) 740-5412 or zf...@nctimes.com.
</quote>