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

[consultant55]

Keep dropping.

[userw014]

"The value of housing in Detroit is now lower than it was in 2000."

"possible bright spot in an otherwise dismal report, ... Detroit, ... showed smaller annual declines."

So, what is the limiting factor for Detroit? The value of the copper in the wires and plumbing?

[Superbus]

Your governor, in her great wisdom, raised taxes in a bad economy

[LaFeminazi]

Your prezznit cut taxes and declared 2 wars.

He will now leave a half trillion dollar negative present to his successor.

[TiffanyHusseinBanned]

Poor Superbus and Sydney. McCane says he will raise taxes to fix this mess. No option is off the table just like feeding the Eyeranians ciggies.

[SuburbanMalcontent]

You lemmings just love the word "taxes," don't you? You think everything revolves around some simplistic idea of raising or lowering some umbrella object called "taxes" because you puppet masters like Hannity and Limbaugh tell you so. Why don't you just crawl back under your rock and stop looking at the world through such juvenile, simplistic eyes.

You know, cutting taxes on the mega rich and corporations worked so well for the economy over the past 7 years too. NOT! It's not just raising or lowering taxes, it's raising or lowering taxes on the right people that make a difference. Oh yeah, and without any taxes, like you republicans want, how to you expect to travel outside of your home? There won't be any operable roadways, and crime will make it look like Mad Max since there won't be any salaries to pay for police. You people make me sick with your selfish idiocy.

[NoTrollZone]

I wish the media would stop headlining drops in home prices without the context of the price increases of prior years. OK, so if you bought at the top of an inflated market since 2006, and have to sell now, you have a loss. But consider how much prices have gone up between 2000 and 2006. Most people, if they bought then, still have solid gains on the value of their homes. An annual increase of 5% in the value of a home where (conservatively) you only have a 10-20% down payment is a very nice return on your investment.

[wagadog]

Agreed -- there's also the way it's reported, for example

"The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May
compared with a year ago"

You get to the "compared with a year ago" if you haven't dropped dead of a heart attack already reading "dropped by 15.8 percent in May"

It seems to me that it's intended to increase the sense of shock.

[EinChicago]

That's the fundamental problem with the C&S Spindex. It only has any value as a marketable commodity in a volatile market. If house prices were flat or stable, no one would care about teh Spindex. Ergo, the spindex manipulates figures to magnify the impression of volatility for teh uneducated.


Huff Po is as bad. The headline reads largest drop on record, but ignores the fact that the month over month decline of 0.9% is actually the lowest since 2006, showing pretty clearly that prices have bottomed or at least lost the downward momentum they once had.

[cooolandrew]

Obama should turn every conversation to the economy and keep linking McCain to the whitehouse. U-tube search : cooolandy obama meets sarkozy. Google paltalk too.

[Nochnoi]

No.... REALLY? Dang..... As someone who is trying to sell a house..... the value dropped by $100,000..­.... Of course, this is Michigan where nothing is worth anything anymore...­.. Argh!!!!!!!!!!

[Mogamboguru]

I feel really sorry for you Nochnoj. If you could manage it, you should try to keep the home until this turmoil will be over - and sell it, when the prices start to rise again. Only THEN you might be able to get some of the home's real value back.

[CharlesJ]

Does this really surprise anyone. I have been saying for years that this was going to happen. Prices should continue to drop as the housing market was extreemly overly inflated. Because of this over inflation in the housing market, many who would other normally qualify were priced out of the market.
Cost of housing went through the roof, in some places nearly doubling in the past 8 years; however the income failed to even remotely climb.

[thegreatgiginthesky]

How long do you estimate this to continue? I've been sitting on the fence for about a year now. Both my wife and I would like to purchase our first home but we don't want to get into it when the housing market and the credit market are in so much turmoil. What do you suggest?

[Mogamboguru]

Wait another 18 months, at least. Prices will fall much deeper still. All stops have been removed, already. Soon banks will be flush with so many repossessed homes, that, it will be cheaper for them to given them away to ANY offer, than to maintain them and pay property taxes for them.

It's still too soon to buy. Only when prices will level out, you'll know that rock bottem will have been reached.

[consultant55]

Keep sitting. Prices have a way to go before they bottom out. Take the top of the market and knock off 40%. Prices are going drop at least that much.

[Zeje]

Rent, don't buy now.

[katemadison]

Start looking at houses. Work with several different realtors (who will show you houses); ask all of them what they think about the market situation in your area. Find friends who are selling a house; ask them what their agent is saying. (An agent trying to sell a house to you may have a very different response from one who is trying to sell your friend's house.) Save money for a down payment; pay off (or down) as many outstanding bills as you can.

Do your research and pay attention.­..but, if you find something you really like and can afford, don't wait for a more 'perfect' situation - it may not come. Good luck!

[WIpatriot]

My advice is also to wait it out, gig. Save your money, you will be glad you did.

[speakingtruth2power]

"- many who would normally qualify were priced out of the market."

Many in the home loan industry ignored 'qualifying' and made bad

loans at higher interest that were bought up in bulk by the likes of

hedge funds. banks and retirement funds managers. We all knew

there was a risk but deregulation and loose enforcement allowed

the speculators to gamble irresponsibly w/ other peoples money.

[Tropiholic]

it's all in your heads!

[WIpatriot]

EVERYTHING is in my head.

[ErnestineBass]

Do these things come with a pop off valve? LOL 8-D

[SonnyBono]

Isn't it great that we have had seven years when the government regulators have been reined in and the free market economy is allowed to control itself. I think we should all be thankful that we have a president that understands the economy - he is a Harvard MBA - perhaps he can continue to advise John McCain when McCain is elected for a third Bush term. Of course, W might have to work pro-bono since we seem to have a significant national debt that will be unloaded on the next president. Well, if W has more important things to do, then Phil Gramm can always step into the job of chief economic advisor - after all, didn't he spearhead the drive to deregulate the markets for subprime mortagages?

[robotfog]

I'd like to see everybody I know have their own home, but a lot of the people I know are not good at handling their own finances. I've seen them buy cars they can't afford and then allow them to be repossessed.

I wish I had the money to buy 2 more houses, though. But I don't. so I won't.

[consultant55]

Good for you!

[Davwbaird]

Things are bad suicide, madness and a dementia presidential candidate, we are doomed.

[Superbus]

More good news for responsible buyers and investors; home prices are expected to fall in some markets (such as South Florida) another 10-15%.

Time to seriously consider some bargain purchases, provided of the course any banks are lending money anymore.

[SweetSydney]

I'm looking in Dallas, but fortunately or unfortunately, the market is still pretty stable here.

How did you enjoy the ridiculous hear during your visit?

[Superbus]

Hot as hell, but that's Texas in the summer.

[LCLiberal]

And what would the almighty McCain do about this? Nothing!

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

[chicago25624]

And how do you lose money in a down market? Only when you sell. All those who are selling because they are moving by choice, do so at their own peril. Those who are moving because they can't afford the house will have lower property taxes as the value has dropped, but are more than likely doing so, because they didn't keep up the payments opn a house they couldn't afford.

Homeownership is not supposed to be easy. It is for responisible people, not those who don't pay their bills in the first place and get subprime loans.

[robotfog]

I agree. I took a walk the other day and passed a mortgage lender that advertised no down payment. Isn't no down payment just a trick to get people to spend money they don't even have? I would think a responsible company would ask for a down payment just to know that the borrower can handle their money.

[ErnestineBass]

"I would think a responsible company would ask for a down payment just to know that the borrower an handle their money."

BINGO!

[danoj]

That's why one should read the contract and ask questions. Just because there is no down payment doesn't mean it's a bad deal necessarily. Just have to read through it and ask questions before signing.

[ErnestineBass]

Subprime loans...hm­mmmm...the type "developed and offered" by a bank, right?

[WillPower]

Those who move sell at a bargain price but they also buy at a bargain price. The real losers are investors who owned several properties and people who bought too much house with an ARM.

[pineapplegal]

Okay - I'm wearing many hats right now. A Realtor (for last 20 years), a recent Seller (who took a huge hit to relocate out of Hawaii...t­hink of the cost there to live) and a Buyer on the fence and not for not wanting to buy (deals can be struck everywhere) but for lack of financing with perfect credit, more than 20% down and money in the bank. The banks need to get back in the saddle before they shoot themselves in the foot. They've swung the penjulum from one extreme to the next. And many people are losing their homes for many different reasons - for some (mostly "investors"), its a hard lesson to be learned and for those that are losing jobs and struggling, my heart goes out to you - hang in there and hope Obama has some magic up his sleeves for this one.

[SingingBird]

What happens to those who move now that have been foreclosed on? They don't buy at a bargain price. They find the cheapest form of rental they can. Then they try to rebuild their lives.

[Heavy]

Yeah, 9000 families are losing their homes a day because they are irresponsible. LOL get a grip. Nice try with the talking point. They are losing their homes because of a staggering rise in the cost of living with at best, stagnant wages. Also countless bread winners have lost their jobs to manufacturers heading overseas, who get tax breaks to do so. And due to a plunging economy businesses are reporting record losses so revenues are not there. Clearly you can only repeat your talking points and have no concept of the bigger picture.

[ErnestineBass]

Must be something in Chicago's water...he­h heh

[CaptainZero1969]

It's as usual more complex than sound bites. Some that got sub-prime were bad credit risks and had no business buying real estate. Many, however, got greedy and used their houses as ATMs with 1% teaser rates. I know otherwise responsible people that made bad bad bad choices, caught up as they were in the fire-sale vibe of a bubble market. Bottom line for me - I will never take anything but a conventional mortgage. The gimmickry is NOT designed to trap consumers but it certainly DOES have the effect of making them think they can afford more than they actually can.

And why did this occur? Lay it at the feet of McEcon advisor Phil "Nation of Whiners" Gramm who was directly responsible for the deregulation that allowed for the securitization of mortgages. This "butterfly effect" action set the stage by creating a situation where lenders could boost their own business by taking all comers and shifting the risks to others. It allowed them to relax or even eliminate due diligence. And who ends up paying for the bailout of irresponsible businesses who pushed for the deregulation that got them into trouble in the first place? We do. All of us.

[CharlesJ]

Dont forget that a lot of those that are in forclosure are there because they lost their jobs due to layoffs and other economic factors.

[drkazmd65]

But just remember folks,... there is no problem,..­. we are all just whiners.

Less than 100 days until Election Day,... let's hope we make it that long without Bushie manufacturing a crisis and grabbing dictatorial powers.

[robotfog]

yep. I'm a whiney bastard, alright.

[ImpalaSuperSport]

It's a buyers market now, if you have the money.

[Superbus]

Great car, especially the 1963 SS 409.

[ImpalaSuperSport]

Absolutely!

[mairs]

Is it really a buyers market now? Or will the prices drop another 15% in the coming year? I've been getting emails of listings from a realtor for a middle class area in Southern California for the last year. There are still listings of $500,000 houses that are 1,200 sq ft junk fixer-uppers.

[MagisterLudi]

re. mairs.
Yes it is a buyer's market in SoCal. But the prices have began a steep decline. It is by no means over. Hopefully prices will come down to about year 2000 level. Average listings now sit on the market for month.

[EinChicago]

depends wher you live. In SoCo? Maybe. In areas that never saw that type of appreciation? Unlikely. A 15% depreciation ion most areas of Chicago for example, would mean prices are around 1992 levels. Which would be unrealistic to say the least.

[Mogamboguru]

Still too early.

Wait until the prices level out. Prices will sure deflate another 30 percent before rock bottom will be reached. At that time, some homes will be real bargains, if not right be sold in backyard-sales to the best bidder.

See the "Make offer!"-sign in the picture above? Those will pop up like mushrooms in the coming 24 months, because banks are flush with so man repossessed homes that, it will become more profitable to them to rather give them away almost free, than having to maintain them and pay all the pending the property taxes to the communities.

Wait until the prices level out. THEN buy. If you can...