Home Prices Are Dropping Again as the Markets Head Toward a Devastating "Double-Dip"

[Donnachaidh]

http://www.alternet.org/news/149683/home_prices_are_dropping_again_as_the_markets_head_toward_a_devastating_%22double-dip%22

Could it drag the larger economy into a double-dip recession?

There was no mention whatsoever of the housing crisis in Barack Obama's State of the Union Address on Tuesday, or in the responses offered up by Republican Reps Paul Ryan, Wisconsin, and Michele Bachmann, Minnesota.

It's a stunning omission. According to analysts, the housing markets have taken a downward turn after rebounding during the first months of 2009. Home prices took a sharp hit in November, and have now declined for 4 straight months. The American housing market now appears to be heading towards a painful “double dip.”

The Case-Shiller index of housing values in 20 metropolitan areas -- the highly respected index that predicted the collapse of the housing bubble years before it crashed -- now stands just 3 percent higher than the trough set in April of 2009, and according to Standard and Poor's, the data suggest that “a double-dip could be confirmed before Spring.” It's already here for many cities. According to the latest data, “nine markets – Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009.”

More at the link --

[villager]

1. already greeted with a head-meet-sand unrec

sadly, not surprising...

[Liberal_in_LA]

3. offset by my rec

[neverforget]

9. The "clap harder" crowd

[Bobbie Jo]

12. Hear ye, Hear ye...The Unrec Crier is on duty.

[newtothegame]

14. Your post is one of the funniest I've read on DU in my few years here :)

:thumbsup:

[ixion]

2. Let's see... it's been going on since 2007... nearly 4 years now

at what point do we call it what it is? "Double-dip recession" is trying to spin our way out of a depression. We are in Year One of the Decade of Suck.

[cutlassmama]

4. ditto

[BlueJazz]

5. You know...I don't want to step on any toes..but I will. If anybody thought that the...

...housing market was going to "Turn around"..I've got some bridges to sell you and a sure way to make money at home
stuffing envelopes.
I mean, danm...who in the hell is going to buy the house??...the rich?..No...the poor?..no...the middle class...ah..yeah..a few...and I mean
a few. The middle class is going downhill fast and they're taking the Home Sales with them.
The good old days are over for at least 2-3 more elections.

[FogerRox]

11. Right, its hyperbole, GDP jumped to over 5%, then declined

by fiscal quarter, 5-3-2, probably up to 3.5% because of Christmas, so its not untoward if housing follows that spike. Is it a double dip, heck no.

[KurtNYC]

6. No jobs, foreclosures, tighter lending ....hmmmmm

I love it when they say some major thing that has been happening for years is:

- not yet confirmed
- "on the brink of," "on the edge of" , and "appears to be heading towards"

A media so prone to exaggeration and hyperbole always seems to find some doubt when it comes to the obvious !

[DCKit]

7. Double Dip.... Like a "W*"

Some of us saw this coming a long way off.

[nashville_brook]

8. k and r

[lib2DaBone]

10. The Goldman Sachs Bailout.. Too Big To Fail....700 Billion to Banks..

$436 Million-per-day in Afghanistan... yet they want to cut grandma's Social Security and make her sit and freeze to death in a cold apartment... WTF?

What is wrong with this country? Nevermind... a stupid question...

[lildreamer316]

13. Okay, I have a question. Why is the house I'm looking at

been only INcreasing in (estimated) value since Oct-Nov? It's on the outskirts of Charlotte (one of the cities that is supposed to have had the *worst* decline in pricing). Of course, this is a Zillow estimate,but where do they get that from? What am I missing?

[KansasVoter]

15. Why do people here seem to LOVE bad news?

[Heywood J]

17. Perhaps people who could never have afforded a house before

and who can buy one now might be happy. It's only bad news for some - everything is a double-edged sword.

[slackmaster]

18. In every heartache a dream home

I bought near the bottom of a housing dip, and have never regretted it.

[jobendorfer]

16. I don't think the bottom has been reached yet

Consider this data from 2009, (2010 data isn't available yet, or at least I couldn't find it):

Median House Price = $216,700
------------------------------------ = 4.35
Median Household Income = $49,777

The median house price needs to fall to between 2.5 and 3.0 x median house hold income ( $125,000 -> $150,000 ).
A ratio of 2.5 to 3 x annual income was the standard used to control mortgage risk for decades, until deregulation made everything "better".
When the housing prices fall into this band, families will be able to buy houses again and the housing market will start to recover.
We're not there yet.

J.

[inna]

19. excellent point, thanks