Standard & Poor's today reported that home prices fell 11.4 percent in January, the steepest drop in 20 years.
From the S&P/Case-Shiller Home Price Indices' website (PDF):
“'Unfortunately it does not look like early 2008 is marking any turnaround in the housing market, after the declining year recorded throughout 2007,' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. 'Home prices continue to fall, decelerate and reach record lows across the nation. No markets seem to be completely immune from the housing crisis, with 19 of the 20 metro areas reporting annual declines in January and the remaining – Charlotte North Carolina – eking out a benign 1.8% growth rate. Looking deeper into the data, you can see that 16 of the metro areas are also reporting record low annual growth rates. The monthly data show that every one of the MSAs has now declined every month since September 2007, marking five consecutive months. On top of that, the declines have increased through time, in general, as 13 of the 20 MSAs reported their single largest monthly decline in January.'”
February Sales
Yesterday's news was the National Association of Realtors' February existing home sales:
“Existing-home sales . . . remain 23.8 percent below the 6.60 million-unit level in February 2007. Single-family home sales . . . are 22.9 percent below 5.80 million-unit level a year ago".
Regional sales volume, year-over-year:
Northeast: -26.4%
Midwest: -19.5%
South: -22.0%
West: -29.2%
“Total housing inventory fell 3.0 percent at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace."
From MarketWatch. “The median sales price plunged to $195,900, down 8.2% from a year earlier, the largest price decline recorded since the Realtors began tracking both single-family homes and condos in 1999. Prices of single-family homes fell 8.7% in the past year, also the most since the records began in 1968.”
“Sales of condos are down 29.7% in the past year. Inventories of unsold condos rose 14% to 604,000, a 13-month supply.”
15 comments:
I love how most of the media reported the NAR numbers as if they were a positive sign.
Hey sales are up! Just like every single year at this time!
No worries, the northern tip of Arlington is OK.
Those sales numbers are ABYSMAL!
a graph would make this stuff easier to read, neil??
haha yea the northern tip of arl is fine!!
sir lancealot would argue, bahhhh, why do they include Nova and md in these numbers!! if it were just dc proper it would be brotherly with charlotte!
I guess no one told the bubbleheads that this is the downside of the real estate cycle. Why should anyone be surprised that sales are down?
Frankly, I'm surprised that prices haven't fallen more than they have. Hasn't anyone here ever watched a pendulum swing? If this really were a bubble bursting, prices would be way way down ... and not down by just the single digits. That's just "noise" given how much homes appreciated in price during the recent housing boom.
Cut the "media" some slack. You can find a lot of stories like this one about the NAR numbers: This is what the SFGate reported in response to the uptick: "It's a dead housing bounce," said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, .... "It is not a recovery. It is wrong to interpret it that way. Wall Street will grasp at any straw."
Yeah Lance is right! Some places are only losing 1% a month, and thats just over the last 2 years. AND 2 years does not a trend make. Those are all single digits.
As the Lances "pendulum" swings theory states, the run up in prices went from 2002 to 2006, a total of 4 years. SO, the down turn will last exaclly 4 years, 2007 to 2011. 4 years times 12 months times 1% equals a 48% drop.
Gee Lance, you sure are a doom and gloomer with your 48% drop in prices. By your calc a 600,000 house sells for 320,000.
To put the national perspective in a slightly different perspective, I went to Google news and searched on the following terms. Numbers indicate how many times the word appeared, for instance, the word Bush appeared 193,911 times.
Economic Meltdown: 805
Uptick: 3,151
Great Depression: 6,245
Britney Spears: 12,541
Plunge: 18,314
Foreclosure: 20,927
Bull: 22,791
Recession: 88,810
Bear: 109,655
So Lance has expected this the whole time. The "pendulum swings", but apparently it swings 100 meters to the right (100% price appreciation), but should only swing 10 meter to the left (10% price depreciation).
Oh and it doesn't apply to "pan global" DC proper - they will stay up.
Actually, north Arlington (within walking distance of Metrorail) is indeed doing just fine!
"Actually, north Arlington (within walking distance of Metrorail) is indeed doing just fine!"
Can you tell me the zip code for this magical area? Is it 22207?
"Can you tell me the zip code for this magical area? Is it 22207?"
Nothing as big as a zip code I am sure...
One observation, the Orange line that close in is about worthless in the morning rush.
The trains are already all full, the platform is seriously crowded and you often have to wait for several trains just to get crammed on to one.
Keep in mind (with pendulum talk) that a swing of 100% appreciation is actually equal to a 50% depreciation.
ie) If a home in 2002 was worth 100K and appreciated 100% to 200K in 2006, then a 50% depreciation by 2010 would bring the price back to
100K.
Therefore, if we see that prices have depreciated in DC 10% in the last year, that actually wipes out 20% of price appreciation! Taking this one step further, if economists are predicting that home prices will fall another 30-40% nationwide that would effectively eliminate nearly ALL of the appreciation gained during the bubble years!
Christopher, the relationship between price appreciation and price depreciation is not a linear relationship. Your example of a 100% price appreciation being wiped out by only a 50% price decrease is true, however it does not translate to different price appreciations in a linear manner:
100% price increase is wiped out by 50% price decrease.
75% increase by 42% drop.
50% increase by 33% drop.
25% increase by 20% drop.
10% increase by 9% drop.
The only correlation that remains constant is in dollar value--a 100K price appreciation requires a 100K price drop to be brought back to the inital value. That is why statistics can get very tricky when you deal in percentages, even though they are the great equalizer when dealing with a wide range of values (such as house prices).
Sorry for the geek-talk.
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