Looks like the news continues to get worse . . . I wonder what silver lining the Administration is going to spin this time?
U.S. home prices fell nationwide in August for the eighth consecutive month, offering little hope of a turnaround anytime soon, according to the S&P/Case-Shiller index released Tuesday. Things could get worse, said Yale economist Robert Shiller, who helped create the index.
“There is really no positive news in today’s report,” said Shiller, chief economist for MacroMarkets LLC, which collaborates with S&P on the indicator. “At both the national and metro area levels, the fall in home prices is showing no real signs of a slowdown or turnaround.”
Home prices as measured by the index have fallen by more every month since the beginning of the year. August is the 21st month of decelerating returns.
Notably, eight of the 20 metropolitan areas in the Case-Shiller index showed their lowest annual returns ever recorded in August. The report showed drops in Cleveland of 4.1 percent; Las Vegas, 7.6 percent; Miami, 7.8 percent; Minneapolis, 4 percent; Phoenix, 8 percent; San Diego, 8.3 percent; Tampa, Fla., 10.1 percent; and Washington, D.C., 7.2 percent.
Tampa surpassed Detroit as the worst performing city. Detroit had a 9.3 percent drop over last year.
Source: Yahoo Business
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I have been hearing from a few sources that the national market and in particular places like California are going to get worse before it gets better. But does anyone have ideas on how long this process will take?
We have only seen the start of the decline in markets like San Diego. At the moment, the foreclosure problem is primarily sub prime centric, with clusters of REOs in a handful of neighborhoods.
The downward trend will accelerate as foreclosures move into the more upscale neighborhoods. It won’t be a sub-prime issue, but a debt overload issue. Not everyone with Alt-A credit (or worse) used option arms and interest only financing to purchase. In 2004, IndyMac said that 65% of their funded loans in San Diego County were NOT fixed rate. With those loans adjusting payments up, the monthly debt load will be more than many can handle.