NEW YORK - A closely watched index shows home prices tumbling by the sharpest annual rate ever in July, but the rate of decline is slowing.
The Standard & Poor's/Case-Shiller 20-city housing index released Tuesday fell a record 16.3 percent in July from the year-ago period, the largest drop since its inception in 2000. The 10-city index plunged 17.5 percent, its biggest decline in its 21-year history.
Home values in all 20 cities fell year-over-year, with Las Vegas prices plunging the most at nearly 30 percent.
However, the pace of declines has slowed over the last three months, but there is still no sign of a bottom, one of the index creators said.
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Ouch.
On the other hand the Dow is up about 220 points as of this post.
Other news bits:
1/3 of CEOs expect to be cutting payrolls in the coming months
consumer spending is weakening
Jobless claims are up already
LIBOR rate is waaay high (this is a rate that tracks willingness to lend, higher means less willing)
house prices are simply deflating out of the bubble to fall line with the extremely steady house price growth rate of the past 100 years.
classic case of what goes up, must come down.
It will be interesting to see how this affects the housing prices in the SA area. We never really caught up to the rest of the country so I wonder how low they'll really go around here?
SA prices have gone up a lot since 2000 on a percentage basis. May not seem that way compared to the rest of the country, but the rise is significant, basically doubling in seven years. Prices are still low there relative to the rest of the country, but keep in mind that this doesn't include houses outside of SA proper where housing prices are, on average, much higher:
San Antonio Median House Prices
Year Value % Change
2007 $103,090 12.48%
2006 $91,650 22.20%
2005 $75,000 9.17%
2004 $68,700 4.41%
2003 $65,800 5.96%
2002 $62,100 7.81%
2001 $57,600 6.08%
2000 $54,300 ---
Median home values long-term always rise in proportion to incomes. If their rise exceeds that, it is a bubble and will eventually be corrected.
What you may be seeing in SA is people relocating from more expensive markets that they no longer can afford. I'm guessing you might be seeing more CA, AZ, NV, and FL plates.
SA still has a very healthy employment market from what I am given to understand.
I have seen a lot of CA and FL plates too.
SA housing market will be ok because we've always been lower end. However, once Toyota closes its doors we will see unemployment rise. I give Toyota 6 months tops.
The housing price decline is necessary and it makes sense. There's no way anyone should expect their house to increase in value by 20% three, four, five years in a row-- that kind of increase is just not sustainable, and in the long run would be even worse because then only wealthy people would be able to purchase houses. I feel bad for people who bought at the peak of the real estate boom, but they'll just have to accept it as a financial lesson learned, and hopefully realize that buying a house is a big commitment that shouldn't be taken lightly, and that living extravagantly and beyond one's means is not a good decision. But still, whatever decline the housing market posts, it's very unlikely that it will match the increases the market saw from the mid 1990s to the mid 2000s.
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