(Crossposted at Doom Network)
The Standard and Poor’s/Case-Shiller numbers for January have just been released today and they show some dire trends. Reuters has a copy of the S&P data here. While the eternal optimists kept saying, “See, the market’s recovering!” when the prices were climbing in 2009, many bubbleheads knew better — and it turns out we were right. The numbers indicate the market is heading toward a double-dip. Who know’s how low it’ll go this time.
Reuters reports:
U.S. single family home prices fell for the seventh straight month in January, bringing prices to just above April 2009 lows, a closely watched survey said on Tuesday…
…”The housing market recession is not yet over,” said David Blitzer, chairman of the index committee at S&P. “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”
Eleven of the 20 cities fell to the lowest levels since home prices peaked in 2006 and 2007, while the overall index was just 1.1 percent above the April 2009 low, the report showed.
(Sources: Zerohedge.com/Reuters)
There were year-over-year decreases in cities throughout the entire country including Seattle, Portland, San Francisco, Las Vegas, Chicago, Detroit, Atlanta, Miami, Boston, and New York City. Make note that Phoenix home prices fell a whopping 9.2% from last year’s prices.
(Source: Reuters)
(Sources: Zerohedge.com/Reuters)
With falling home prices and a 17-month surplus supply of homes, it looks like the market may get much, much worse before there’s any sign of a recovery. It’s likely to take a very long time — on the order of decades — before the market recovers. Of course, these numbers aren’t even taking into account the effect future US National Debt and weakening of the dollar will have on the market.
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I am seeing very comparable numbers in Tallahassee. My recent case study shows market equilibrium in 2018! No quick fix in the housing market.
I’m not surprised from what I see here in Atlanta. I’ve been doing property evaluations for houses have sold to the buyers for next to nothing in auctions, REO’s, and short sales. It’s presenting a real downward pressure on housing prices here. I don’t see it ending any time soon.
Not the case here in DC. As CS shows, prices are up about 12% from early 2009 levels and rising on a MOM and YOY basis.
Back in 09 people told me DC was “different”. I didnt listen to them and now I am worried I wont be able to afford anything.
Yeah, Reuters reported a 3.6% year-over-year increase in the D.C. area compared to last year.
Yep. And that 3.6% gain is on top of another 5.1% gain the year before that. It just doesnt stop!!!
Back in 09 people told me DC was “different”. I didnt listen to them and now I am worried I wont be able to afford anything.
We’ve been hearing how different places are “special” since we started HD. I’ve heard dozens and dozens of times how [insert city here] is different, how they have [insert distinguishing feature], how they won’t have a bubble because [insert reason for people to want to move here, as opposed to somewhere else], and how [reason why their prices aren't as "bubbly" as some other city].
Bubbles have an upside and a downside, and money moves from city to city as people try to find safe places to invest. D.C. is no different – it’s still subject to the same laws of supply and demand as everywhere else.
There are a few exceptional cases where the worth of an area increases – for example, when gold was discovered in California, the worth of land increased due to the potential utility (gold mining) one could get. Likewise, opening new factories tends to drive up local prices, as there are now more jobs (and more reasons to live there).
D.C. is just late to the party, and is in competition with the rest of the country. All real estate is not local, as people have the freedom to move, and cost of living to consider. As long as the economy continues in it’s impairment, people there will end up squeezed on energy and food prices, and real estate price increases that don’t correspond to wage or population increases. In other words, it’s another bubble, and it will correct over time – as they always do. If you’re lucky, it may even punch through and (eventually) be a great time to buy.
I sooo want to believe you. The problem is, since early 2009 when DC case shiller hit 165, people have been telling me: Trust me, DC is NOT different; DC is just late to the party, DC will head back down soon, etc. etc.
In the mean time, prices moved into the high 160s, then low 170s, all the while I was told, just wait, its not different, its coming down, etc, etc.
Now its in the low 180s and hardly budging at all during winter, a time when prices usually have substantial seasonal decline.
Accordingly, my question now is, how much longer would you be of the opinion “its gonna come back down” before you eventually conclude “I guess I was wrong”? 2011? 2012?
The Washington DC housing market is different from everywhere else – it is the immediate benefit of sick levels of federal government spending. Trust me. The government is going to have to drastically cut spending, or it will go bankrupt. No company, entity, or government can simply ignore financial reality forever. Once the DC spending spree is over, there won’t be as many people with their “high paying” government jobs to buy homes. Thus, prices will fall.
nice article, thanks for information