How bad has the housing market gotten? With home values dropping by faster rates each month, a real estate agent near Detroit said that if houses weren’t priced as low as foreclosures, they simply would not sell.þþThat grim assessment underscored numbers released Tuesday showing that home prices in 20 metropolitan areas across the country dropped at a record rate of 18 percent in October from a year earlier as the fallout from the financial collapse reverberated through the housing market.þþAccording to the measure, the Standard & Poor’s/Case Shiller Home Price Index, all 20 cities surveyed reported one-year price declines in October. Prices in 14 of the 20 metropolitan areas fell at a record rate.þþ“October was clearly the free-fall month,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “Everything was going against us in October, without exception.”þþAfter increasing steadily through the first part of the decade, home prices have fallen every month since January 2007, their slide accelerating as troubles in the housing market infected the broader economy and brought down financial firms. Now, as buyers sit on the sideline and a glut of unsold homes clogs the market, economists say that home prices might continue to slide throughout 2009.þþ“It’s just been an absolute downward trajectory,” said Michael Darda, chief economist at MKM Partners.þþAccording to another report released Tuesday, the December survey of consumers by the Conference Board, overall consumer confidence dropped to its lowest levels on record this month, after rising slightly in November, as Americans braced for a long recession.þþOnly 6.6 percent of Americans said that business conditions were good, and 6.2 percent of people said jobs were plentiful, down from 23.6 percent a year ago.þþPrices in every metropolitan area in Case-Shiller’s 20-city index dropped from September to October, and six of them — Atlanta, Detroit, Minneapolis, Washington, Charlotte, N.C., and Tampa, Fla. — posted record one-month declines. The index excludes many midsize metropolitan areas and some large cities, like Houston and Philadelphia.þþThe numbers show that the cities that had the greatest gains in the housing boom are now suffering the steepest drops as a flood of lender-owned homes and distressed sales hit the market. þþPrices in Las Vegas and Phoenix, where developers built subdivisions stretching into the desert, fell by nearly a third in October from 2008. þþPrices in Miami fell by 29 percent. There, homeowners who tried to wait out the market are paying a price, said Madeline Romanello, a real estate agent with Douglas Elliman. Sellers who turned down offers of $700,000 for a house they had listed for $900,000 are now scrambling to sell for $550,000, she said.þþPrices in New York declined 7.5 percent in October over the same month a year ago.þþFourteen of the 20 cities in the Case-Shiller survey posted double-digit declines for the year. The relative winner was Dallas, which had the smallest decline, 3 percent. þþRealtors said that foreclosure sales and distressed sales dominated the market, forcing other sellers to lower their prices or take their homes off the market and wait.þþ“If the house doesn’t have a foreclosure price on it, even if the owners aren’t in foreclosure, buyers aren’t even looking,” said Kathy Buterakos, a real estate agent in Grand Blanc, Mich. “It’s the worst I’ve ever seen it.”þþTo stimulate interest in open houses, she has sent out bulletins to neighbors, posted notices in gyms and local apartment complexes and had her sister put up fliers at a hospital. But no one has responded, Ms. Buterakos said.þþThe Case-Shiller numbers were the latest round of bleak news for the housing sector, which is at the center of the country’s broader economic troubles. Foreclosures, bad loans and collapsing housing prices contributed to the financial crisis earlier this year, and now the widening recession is dragging housing down even more.þþLast week, the National Association of Realtors reported that sales of previously owned homes, which dominate the market, fell to the lowest rate in years. Home values tumbled 13 percent in November from a year earlier, the sharpest drop in more than 40 years, the industry group reported.þþA glut of unsold houses is weighing down the market, and housing is likely to deteriorate further in 2009 as the jobs picture continues to weaken. Unemployment is at 6.7 percent, its highest point in a decade, and is expected to rise further next year, to above 8 percent.þþ“People who think they’re going to lose their job don’t buy a home,” Steven Ricchiuto, chief economist at Mizuho Securities, said. þþ
Source: NY Times
