The slow down in the US (and global) housing market is not news, of course. Everyone’s known for the past year that the crazily increasing prices of real estate – especially in hot markets like California – have been slowing down. But so far prices haven’t actually decreased in most markets. Unlike stock prices, a real estate bubble doesn’t generally burst, they say; instead it suffers more of a slow leak, leading to a slowdown and plateau.
Well now it’s gone a step further. Now prices are actually decreasing.
abcnews.go.com/Business/wireStory?id=2986208
[quote]U.S. home prices continued to fall in January, with prices in 10 major cities now down 0.7% year-over-year, according to Standard & Poor’s and MacroMarkets LLC, which released the January Case-Shiller price indexes on Tuesday.
The 10-city index is down 0.7% in the past year, the first year-over-year negative reading since 1996. The 20-city index is down 0.2% year-over-year. A year ago, prices were rising 15%.
“The annual declines in the composites are a good indicator of the dire state of the U.S. residential real estate market,” said Robert J. Shiller, chief economist at MacroMarkets. . .
“We look for price declines in the bubble regions but flat prices nationally,” wrote Michelle Meyer, an economist for Lehman Bros. Goldman Sachs economists said they expect prices to fall 5% in 2007 compared with 2006. . .
Home prices fell from December to January in 17 of the 20 cities; only Miami showed any price gains. Prices were flat in Charlotte, N.C., and Seattle. Prices were falling fastest in January in San Diego, down 1.7%, or a 22.4% annual rate. Prices dropped 1.1% in Los Angeles, or a 14% annual rate. . . [/quote]
Marketwatch Article
Bad news for homeowners and bad news for the stock market, but good news for me as I hope to escape this rock some day and return to California, where prices have soared to absurd heights. Looks like in a year or so things may be looking better.