From the Associated Press:
Reports Reflect Bleak Housing Picture
House prices may still have a long way to fall.
Across much of the nation, home values are dropping — even those backed by solid mortgages — and banks are repossessing more every day. Most experts say the dive won’t hit bottom for another year and only after excess inventory is sharply reduced and credit markets improve.
More government intervention may be needed, too, if the free market system doesn’t work quick enough.
“The housing value crisis is spreading and deepening,” said David Abromowitz, a senior fellow at the Center for American Progress. “It has gone way beyond subprime borrowers stretched too far with bad loans and now has clearly extended into the housing markets more broadly.”
U.S. home prices dropped 8.9 percent in the final quarter of 2007 compared with a year ago, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday. That marked the steepest decline in the index’s 20-year history.
Meanwhile, the narrower Office of Federal Housing Enterprise Oversight said Tuesday that nationwide prices dipped 0.3 percent in the fourth quarter, the first annual decline in 16 years. Eleven states posted declines in values for the year, while prices in nine states appreciated more than 5 percent.
The OFHEO index is calculated using mortgages of $417,000 or less that are bought or backed by government-sponsored mortgage companies Fannie Mae or Freddie Mac. That excludes properties bought with some of the riskier types of home loans or homes in more expensive markets like California and the Northeast.
“We reached a somber year-end for the housing market in 2007,” said Robert Shiller, one of the architects of the S&P/Case-Shiller index. “Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look, things look bleak.”
From the Record:
Home prices dropped 5.6% in N.Y. metro area
Home prices dropped 5.6 percent in the New York metropolitan area, which includes North Jersey, during 2007, the S&P/Case-Shiller Home Price Indices reported Tuesday.
That drop was not as large as the national average, down 8.9 percent. And it was dwarfed by the price declines in several deeply troubled real estate markets, including Miami, Las Vegas and Phoenix — all down by more than 15 percent.
“We reached a somber year-end for the housing market in 2007,” said Robert J. Shiller, a Yale economist who helped create the indices. “Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look, things look bleak.”
Even after the decline, however, New York metropolitan area home prices remain twice as high as they were in 2000.
Also Tuesday, RealtyTrac Inc. reported that 1.5 percent of the homes in New Jersey were in some stage of foreclosure. The state ranked 18th nationwide in the percentage of homeowners in default on their mortgages. The highest rates were in Nevada, California and Florida.
Someone was smart enough in 2004. Please read. Very interesting and accurate prediction
http://www.washingtonmonthly.com/features/2004/0404.wallace-wells.html
There Goes the Neighborhood
Why home prices are about to plummet–and take the recovery with them.
By Benjamin Wallace-Wells
In Washington, where words are the currency, where imprecise verbs threaten the loss of a political career and misapplied nouns can doom a movement, there remain a few figures who get a general pass not just for a certain degree of verbal imprecision, but for a fairly deep-seated degree of intellectual wackiness, a penchant for regularly saying very odd things. Newt Gingrich is one of these public figures, Robert Byrd another; Helen Thomas has her moments, too.
You’ll be sitting in the audience listening to a sensible speech by, say, Gingrich, and all of a sudden you get the notion that aliens have captured his brain. Befuddled, you’ll turn to your friend next to you, the libertarian true-believer, and he’ll shrug his shoulders and whisper back: “Oh, it’s just Newt.” And then, a few minutes later, the speaker’s episode will subside, the aliens return the brain, and the speech continues on its before-we-were-so-rudely-interrupted track. No one says a word. The capital’s press gives these folks a pass from its usual lawyerly scrutiny because they are regarded as sages who can be relied upon to speak some kind of unusual and valuable truth, whose occasional episodes of profound intellectual oddness are thought to stem from the same deep source as their general brilliance.
One of these spells flared up during the last week in February, when Greenspan recommended that the home-owning public take a good hard look at switching from fixed-rate mortgages, under whose terms payments stay the same no matter what interest rates do, to adjustable rate mortgages (ARMs), where payments fluctuate along with interest rates–which, right now, makes close to zero sense. Interest rates are lower than they’ve been in 30 years, and, with all economists predicting a general economic upturn, and Bush’s budget deficit and the weak dollar sucking up capital, little doubt exists that interest rates must rise, in which case, switching from a fixed-rate to adjustable-rate mortgage would be pretty costly for any family naïve enough to take Greenspan at his word. The episode did not pass completely without critical notice. It was “the strangest bit of advice ever to be proffered by an American central banker,” Jim Grant, publisher of Grant’s Interest Rate Observer, told the San Francisco Chronicle. Then the press moved on: “Oh, it’s just Greenspan.”
But sometimes wacko ideas can betray deeper truths. It is tempting to ask what stake the chairman might have in trying to convince millions of people to do something so contrary to their own interest. One theory floated by Fed-watchers is that the chairman is trying to help out his classic institutional constituency, the big banks, which hold trillions of dollars in fixed-rate mortgage paper. There may be something to that theory, but there is almost certainly a deeper and more important motive behind this curious advice. Quite simply, Greenspan is trying to keep a wobbly and fragile recovery alive–and using mortgage refinancing to do it.
(snip -jb)
it isn’t bleak or somber, it’s not even what it should be.
Let’s say you’re a teacher, married… 50k starting gets thrown out there a bit for salary OMG, so let’s say you’re an X’er without the Boomer prosperity & a kid or maybe none & you’re at 60k & married to another teacher. 120k x 2.5 income & hell, I’ll even give an out, & say one of you is a veteran so you’re exempt from PMI… you’re looking at 300k maybe 350k if mummy & diddy boomer were nice to you.
#3. sorry, i meant a disabled veteran of 30% or more = exempt from PMI.
(for the curious, some municipalities, like bridgewater will give you $500 off; state will give you tax free status if you’re 100%)
Can someone give me some info on MLS# 20714445. Thanks very much
Only 18th? We can do better!!!!
check this out guys. More idiots
http://www.armandomontelongo.com/
#7 That’s perverse.
Does anyone have access to the Carolina MLS?
This place is amazing………..
I want it.
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=220190541447&ssPageName=STRK:MEWA:IT&ih=012
Even after the decline, however, New York metropolitan area home prices remain twice as high as they were in 2000.
Disgraceful…. I’m going to f*cking bed.
#9 I think Mitchell does. If not through Grim I can give you the name of my agent in Charlotte area. Just moved the house we owned down there.
Very lucky plus had a good agent.
Also don’t believe the hype that Charlotte is up 2%.
What’s happening is that a 250k house in Jan 07 is now being sold by the builders for 255 to 260k. BUT the builders are throwing in 10k of upgrades as standard, giving 15 to 20k in additional upgrades for free (used to be 5k), paying a buyer agent bonuses of 3 to 5k, another 3 to 7k in closing costs, and even tossing in a bit more of bling bling.
Its more like a 10% or more drop from Jan of 07 if you factor all those perks into it.
It’s going to get real ugly this spring for the resellers in Charlotte. You can get a 2900 sq ft house with hardwood floors through the downstairs, granite countertops, recessed lights, spa bath, 2 car garage for 262k if it is in the builder’s finished inventory. Same house was 290k to build on order in summer 06. Serious comp killers.
#10 They can’t even spell dollar correctly. “dolor”.
What might be a fair bid on a property currently priced at 399k that sold in 2002 for 250k? (No renovations were done, and the property would need about 50k worth of work to convert from a 2-family to a 1-family home).
whatever the seller will take Ambrose.
# pretorius Says:
February 26th, 2008 at 4:05 pm
There is more action in New Brunswick and Hoboken (pop. 40,000) than any North Carolina city.
This is patently false. Clearly, you have not spent any time in Wilmington, NC, Raleigh, NC, or Charlotte, NC.
Those three cities destroy whatever culture/nightlife you want to bring the table in NJ. When you factor NYC into the equation, it’s no question … but those three cities are leaps and bounds ahead of anything Newark has to offer.
* Lived in NNJ for two years
* Lived in NC for one summer
bairen, #13: seen the dollar index lately?
DOLOR is correct– our bucks are on a really painful path….
sl
#12, thanks
I currently live in a suburb outside of Charlotte. Believe me, there are still way too many people down here who are drinking the NAR kool-aid.
Builders are laying off people left and right. Sales are extremely slow. Major incentives and reductions are the norm. Median prices have risen up until lately because many of the newer homes built have been extremely larger than ones in the past.
Now the chickens are coming home to roost.
Even as I say all that, I love it here and don’t plan to move for at least 10 years so I think I’m ok…as long as I’m working, the family is happy and make my mortgage payment, I’m happy….
thanks again
“Home prices dropped 5.6% in N.Y. metro area ”
Pretorius – does that mean you were wrong?
#12 (continued)
The “2%” increase is extremely deceiving. Goto the NC association of realtors website and you’ll see YOY # of units sold for Charlotte metro is down over 20% for the past 5 months running….things are bad down here. I tell these people that but they don’t listen.
Also, all the knowledge I’ve gained I attribute to this site….when you start talking to realtors here about YOY #’s and TRUE DOM (not when the clock resets after taking the house off the market..the TRUE DOM), they start shaking and don’t know how to respond….LOL
#16 (bloodbath)
same boat..lived in NC for one summer and uptown Charlotte has tons of nightlife…(more than Hoboken or New Brunswick…LOL)
People who say otherwise have not been to Charlotte recently, or at all for that matter…
“Quite simply, Greenspan [was] trying to keep a wobbly and fragile recovery alive–and using mortgage refinancing to do it.”
Exactly.
Greenspan was propping the economy up in a RE/credit boom from 9/11 until the souffle finally went poof. We all forget, but nothing else was working back then. Growth stocks, bonds, you name it…NOTHING else could gain traction.
Which is why it’s crazy to say that RE can’t also now drag us into prolonged recession. If it was enough to pump the economy to that degree, it can also plow us under.
Especially when RE is underpinned by the abuse of leverage.