Home price drops exceed Great Depression

[Joanne98]

(Reuters) - Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.

Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month.

It is a dubious milestone for the U.S. housing market which has failed to gain much traction despite a host of government programs to reduce delinquencies and encourage demand with temporary tax credits and lower interest rates. Many economists expect further price drops, even if there are some anecdotal signs of growing demand, such as in pending home sales data.

"For the next six to nine months, the larger factors affecting the housing market that will produce more home price declines will be the excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated employment, Stan Humphries, Zillow's chief economist, said in a blog post.

http://www.reuters.com/article/idUSTRE70961E20110111?source=patrick.net#fixedpanelContainer

[MannyGoldstein]

1. I believe that they are still far higher than in the 1970s

Compared to a median workers salary.

[MorganNick]

2. Economy-Home prices

The economy just skipped a beat in the third quarter,and the consumers struggle to pay back home equity,auto and other loans.

http://www.wellgrowchinasourcing.com/

[Warpy]

3. Of course. The major drop in house prices had already occurred

all during the 1920s, along with land prices. That's why so many farmers ran into serious trouble, they no longer had sufficient collateral to borrow money during lean years.

This is really comparing apples to oranges. Now if housing prices had been falling since about 1998 instead of escalating into a bubble market, the comparisons might be appropriate.