Home Prices Plunge Record 15.8 Percent In May

NEW YORK — Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.

Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.

Nine metropolitan cities _ Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. _ posted record declines in May. And the value of housing in Detroit is now lower than it was in 2000.

But a possible bright spot in an otherwise dismal report, seven metros _ Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta _ showed smaller annual declines.

Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.

Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last metro still showing price gains.

Comments

[invisihand]

There is a brand new, never lived in McMansion that is for sale right next door to my 60 year old N. Dallas home. The McMansion has been on the market about 1 year now, price dropped $150K just recently. Any takers?

[Heavy]

Right, so I can be upside down in my mortgage in a matter of days....lo­l. No thanks.

[NoblesseOblige]

I hear George and Laura are looking to buy a house in your area. Maybe you should give them a call. You certainly couldn't ask for better neighbors.

[onelife1]

this is scary stuff.

[alaintex]

Median home values adjusted for inflation nearly quadrupled over the 60-year period since the first housing census in 1940.

[CaptainZero1969]

Out of curiosity, do you have a figure on incomes for the same time period? Thanks!

[CaptainZero1969]

Wait - I found it. From 1948 to 2000, inflation adjusted income for a single wage earner has gone from 20,000 to 37,600, not quite a doubling.

http://www.visualizingeconomics.com/2006/10/29/income-by-number-of-earners/

[LaFeminazi]

Trickle down economics.

Is that when you empty the chamber pot on the plebs?

[SweetSydney]

Still fighting the last war?

Wealth redistribution hasn't worked very well in Europe. Ask around since you've boots on the ground.

[LaFeminazi]

We are in Martinique, apparently it still belongs to the French.

It doesn't feel very European mind you.

[thegreatgiginthesky]

Exactly which nation in Europe has it not worked well in?

[LaFeminazi]

Oh and SillySyd its you that is always going on about the last war.

[ChristianEcon.com]

Depends on which direction you redistribute it.

[JoJoKewl]

Still wearing the same sized jeans???

[soundfury]

Bin-go.

[Superbus]

A risng tide lifts all boats. That's the basis of the dynamics of supply side economics. Liberals only see life and economics as a zero sum game, a very self limiting view.

[LaFeminazi]

BS BS BS BS

Bye shortbus.

[thegreatgiginthesky]

Your analogy would work if all boats were created equal. They are not. A rising tide if big enough can also capsize a boat. Put that imagination to work and think about that.

[lauram]

Yeah, but what if you don't have a boat? You drown.

[Heavy]

A rising tide lifts all boats is a metaphor for trickle up economics smart guy.

[Joeblue]

Even the dude that thought up piss down economics said it was just theory. Genius!

[GoCards1978]

Bravo!

[UnbiasView]

May I ask why this is a bad thing . . . unless that is you have taken out a home equity loan for some reason and used your house as a bank.

This just shows housing was badly inflated through the 1990s and early 2000s . . . the market is coming back down to Earth.

[ErnestineBass]

STOP THAT, you're starting to make sense, Unbiassed!

[EinChicago]

Bwah hah ha.

Oh wait, you're serious? Need a new sandwich board?

[Heavy]

Mark it on your calendar folks. Just ribbing ya Unbiased :)

[BeyondGoodAndEvil]

Actually there's nothing wrong with the market coming down to more realistic levels, as it's been overpriced for some time. However, people are losing their homes because mortgage brokers were setting up liar loans so they could get their commissions and then selling these loans in bulk as securities to banks and financial institutions. This is all the result of deregulation, of which McCant promises more.

When housing prices drop and people are losing their homes and their jobs, and the national debt and deficit are at record highs, and we have stagflation, then we're all in trouble. Manufacturing has been decimated in this country, and without manufacturing as the base for our economy we are going to see a permanent economic decline.

[whitneyk]

It's a bad thing if you bought your house in 2007 and now you've lost $32,000 (assuming your house was $200,000) which is almost as much as a 20% downpayment. This crisis is hurting the irresponsible the most, but it is also slamming those who did everything right and are now getting screwed by greedy lenders who for many years couldn't find a loan they didn't like, no matter how risky it was.

[preatorius]

Is tis suppose to be bad news!
Most of us are cheering, and hoping for more. Housing prices had placed the American dream out of reached for many U.S. citizens.
Greedy real estate agents and predatory lenders helped to push the market to the edge, and now that it has toppled over, they are whining because no one can buy.

It is time to stop worrying about granite counter tops and home theater rooms, and focus on cleaning up the mess we made indulging ourselves. All of these luxuries come at a price: exploitation, warfare and pollution.

[Heavy]

The only problem is no one wants to catch a falling knife, or, in other words, buy while the market is still dropping. Yes home prices are dropping but if the bottom falls out of our economy it won't much matter.

[thegreatgiginthesky]

Thanks for the information to my query everyone. I was 60% sure that I needed wait but I think my wife and I are going to stay away from it right now and revisit it in another 12 - 14 months. Thanks again for all the advice.

[ErnestineBass]

That's the prudent thing to do, gig. Good luck, friend!

[thegreatgiginthesky]

Thank you!!!

[EinChicago]

depends where you live. If you ignore the Huff Po false headlines and actually read the article and figures, you'll see that even the CS Spin-dex reports a significant slowdown in price decreases. The prior month over month drop was 1.5%, the month before that 2%, the latest one, 0.9%. There is definitely a trend that prices are stabilizing. The real kicker is that this decelartio­n/stabiliz­ation records events before teh housing bill passed. With no outside influence, the deflationwas already stopping.

[rinpochet]

I live in the San Francisco Bay Area and even with these falling prices, still couldn't afford to purchase a house even if I wanted to. The average is still around $800,000.

I don't see them ever dipping to the point where the average worker can afford them.

[swooge]

IN Dallas I just bought my mother-in-law a 2000 sft 4 bedroom-2bath house for $130,000.

Location, location,l­ocation...­heh.

[JamesR.]

What a generous son in law.

heh

;)

[Superbus]

It would be a smart thing to move to a more affordable locale.

[ErnestineBass]

Closer to their job, shortbus, or farther away?

Good gawd, you are dense.

[LaFeminazi]

Are you moving to Haiti shortbus?

There will soon be plenty of free property

[Joeblue]

Idiot plane and simple buss boy.

[Robert11010]

You want to live in SF? Then you pay ...
I lived there for 20 years, then bit the bullet and bought a house in Vallejo in 2000 - the last affordable place in the Bay Area. 5 and a half years later, after it tripled in value, I sold. The young couple who bought it financed 100% of it - they didn't even pay closing costs. But - that was their choice. If they wanted to sell now they'd have no choice but to walk away ...

[MouthFountain]

Well, get used to that. Because, while the rural may continue to drop, the cities are going to start going up again once the gas prices get back into gear. And, they will.

IMHO, the cities are going to become increasingly exclusive. The forces include security, energy, and business. All three will require density and the features of urban areas that foster productivity.

[BeyondGoodAndEvil]

The Bay Area is outrageous. 20-30 years ago, the Middle Class could buy a home almost anywhere in CA for approximately the same amount as they earned per year. Not any more.

[ChristianEcon.com]

...and that on generally one income and not necessarily a college degree (well, 30-40 ya). Ahh, the socialism of America's heyday....

[Superbus]

LCLiberal See Profile I'm a Fan of LCLiberal
And what would the almighty McCain do about this? Nothing!

http://www.political-buzz.com/

Doing nothing is probably the right answer, especially in the long run.

[serialcoma]

"Do nothing" - the republican way.

[Heavy]

Then we should put Michael Brown in charge of the housing crisis?

[MagisterLudi]

Cycle: Prices go up-reach a high plateau- price come down- reach the trough- prices go up.
This cycle been happening ever since the ancient Sumerians.­..... Duh.

Prices go up, some people benefit. Price go down, some people benefit. Duh

And at each level, some people cynically exploit this natural basic phenomenon.

High prices--- wah, wah.... common decent folk cannot afford to buy a home....

Low prices---- wah, wah, common decent folk cannot afford to sell a home...

[ErnestineBass]

Jobs, Ludi, what about jobs?

What about stangant wages?

[SweetSydney]

Think O's isolationist trade policies will help create jobs?

What about his 40% effective tax increase on small business owners, who create the majority of new jobs?

[rmreddicks]

Do you know how that trickles "trickles down" on PEOPLE? And surges up to slime?

[MouthFountain]

A simplification that masks the real issues surrounding what is going to be a rather large decline. But so long as you're happy. Remember, glass beads are not knowledge.­..

[ChristianEcon.com]

The trend pervading all these "cycles" is an ever-increasing percentage of wealth transferring to the richest. Working people have not been making gains, cycle in, cycle out--and the more free market, anti-regulatory implementation, the worse it gets.

[LaFeminazi]

The prezznit

Stood for a balanced budget

shame someone cut his legs off.

[poco767b]

http://icanhascheezburger.files.wordpress.com/2008/05/funny-pictures-raccoon-subprime-mortgage.jpg

[Badwater]

Good thing the Preznit has that Harvard MBA. He'll think our way out of this mess.
Too bad that when he does think he thinks that the thing to do is cut taxes for himself, his family, and their cronies.

Mission Accomplished Again!

[OnTheOtherBeach]

Yale,actually. Don't insult Harvard.

[ErnestineBass]

Undergrad degree from Yale.

MBA from Hahvahd.

Fact check much?

[Jimwriter]

Remember that the current housing meltdown (or correction, as the economists would say) came from a perfect storm of federal demands for looser lending requirements, lenders more than happy to offer loans to folks who couldn't possibly pay them back after the teaser rates expired, and buyers who bought more house than they could afford. Both the Clinton and Bush administrations advocated the "ownership society" for people who couldn't qualify in the past for mortgages. Add to that the greed of speculators who pushed prices up to astronomical heights, and the die was cast.

The recent bailout actually rewards the lenders for bad lending practices more than it does the homeowners who signed on the dotted line promising to pay back loans that any reasonable borrower would know couldn't be done. The only reason the defaults didn't happen sooner was that the teaser rates hadn't expired.

Unemployment levels are about one-fifth those of the Great Depression; that's not what did in most of the new homeowners.

[DontSpinMeBro]

IMO, housing prices were pegged to the rising Euro rather than the falling dollar. There could be quite a bit more fall to come.