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House Prices Drop Everywhere – But DC

From a suddenly not so sanguine Associated Press:

Home prices plummet in most big US cities

By Derek Kravitz And Janna Herron, AP Real Estate Writers Tue Feb 22, 2011

WASHINGTON – Home prices are hitting new depths in most major U.S. cities and are expected to fall further over the next six months.

In a majority of metro areas tracked by Standard & Poor’s/Case-Shiller, prices have fallen to their lowest points since the housing bubble burst.

High unemployment, stricter lending rules and fears that prices will continue to fall are among the reasons why few people are buying homes. A rising number of foreclosures are also weighing down prices. And as more people get stuck in depreciating homes, housing could slow the economy.

Across the country, the housing industry is recovering unevenly. Many of the cities now setting new lows have been struggling with high unemployment, more foreclosures and, in some cases, a delayed response to the housing bust in 2006 and 2007.

Homes in more established areas — those that had little room to build during the housing boom — are doing a better job holding their value. Coastal cities in California and Northeast are seeing much smaller price declines. In Washington and San Diego, home prices even rose over the past year.

House prices went up in Washington, DC? What a shock.

Still, many people who want to buy can’t. Nearly 25 percent of households cannot move because they owe more on their mortgage than their home is worth, according to Capital Economics. An additional 25 percent can’t qualify for a new mortgage because selling their homes would leave them with too little money for a down payment.

"We’re likely to see new lows hit across most major markets at some point in 2011," said Mark Vitner, a senior economist at Wells Fargo Securities. "We’re afraid of all this turning into another vicious cycle."

Housing prices in all but one of the 20 cities tracked by Standard & Poor’s/Case Shiller fell in December from November. And the overall index declined for the sixth straight month. Washington was the only metro area where prices rose month to month.

So it is only in Washington, DC, where housing prices have gone up.

Eleven of the markets hit their lowest point since the housing bubble burst in 2006 and 2007: Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Seattle, Tampa, Fla., and Portland, Ore.

The housing sector is struggling even while much of the economy is recovering slowly but steadily. The latest evidence of the divide came Tuesday when the Conference Board said its Consumer Confidence Index rose in February to its highest point in three years. The report suggested that many people are more hopeful about hiring and income gains over the next six months.

So the only evidence that the AP can point to to claim that the economy is recovering is ‘consumer confidence’? It’s no wonder consumer confidence is up, when the AP and the rest of the media tell us week in and week out that prosperity is just around the corner.

By contrast, the outlook for housing this year is dim. Construction of new homes is on pace for little more than half the million units a year that economists consider to be healthy. And the number of vacant homes is near a record high.

Some of the worst declines in home prices are in cities hit hardest by high unemployment and foreclosures…

Homes in Las Vegas, on average, have lost more than half their value since 2006. They now sell for less than they did in 2000. The city had a record-high 14.9 percent unemployment rate in December. It also led the nation in foreclosures last year

Three out of every four sales in southern Nevada are foreclosures or "short sales." These sales occur when a bank lets a homeowner sell a home for less than what’s owed on the mortgage…

And some would say they deserve their fate, since they keep re-electing Harry Reid.

The median home price has dropped by half since 2008, to roughly $110,000. Prices in one central Phoenix zip code have plunged 81 percent in the past three years…

If this is true, it would actually be good news for the housing market, since the average price of a house throughout the country’s history – adjusted for inflation – is somewhere around $100,000. But that is the average, versus the median price.

Even so, we still find this hard to believe, judging from the real estate listings.

Millions of foreclosures are also expected to flood the market this year. That will force prices still lower. For many, the big question is, when will prices bottom? …

But we are in a recovery. The AP says so.

This article was posted by Steve Gilbert on Wednesday, February 23rd, 2011. Comments are currently closed.

3 Responses to “House Prices Drop Everywhere – But DC”

  1. TerryAnne

    It’s because no one here can fathom not being able to say that they spent $500,000 on their home, or admitting that they got suckered when they bought and will have to eat it. I’ve been looking into buying a house since I plan on being here for the rest of my life and because renting will kill you here ($1600 for 600 sq ft)…but I can’t and won’t spend $300,000 on a condo or a two-bedroom ranch starter home in the middle of North Guatemala. It’s ridiculous!

  2. Liberals Demise

    Wow…where to begin…..I have a headache now!

  3. canary

    My states media continues to lie, that our state has not been effected as the rest of the country. Homes have dropped in depreciation. Its the time to buy, but not when your own home is worse less. It’s a good time for those that don’t have homes to get nice homes, or for people to move here. And the illegals and muslims sure have been growing. I suppose the new penalties to those that rent to illegals doesn’t hit the pockets enough to stop renting. These landlords are getting paid no telling how much cash, and they get paid on time.


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