Skip to comments.Home prices hit pre-boom levels in 14 US cities
Posted on 03/29/2011 2:20:31 PM PDT by Nachum
NEW YORK (AP) - Damage from the housing bust is spreading to areas once thought to be immune.
In at least 14 major U.S. metro areas, prices are now at 2003 levelswhen the housing bubble was just starting to inflate. Prices will likely fall further this year, making many people reluctant to buy or sell. That would push down sales and prices more.
The depressed housing industry is slowing an economy that has shown strength elsewhere. And it's starting to hurt those who bought years before the housing boom began. In some cities, people who have paid their mortgages for a decade have little or no home equity.
Prices have tumbled in familiar troubled spots, such as Las Vegas, Cleveland and Detroit. But they're also at or near 10-year lows in Denver, Atlanta, Chicago and Minneapoliscities that weren't as swept up in the housing boom and bust.
"It's been tough on the lower class but it's filtering up," said Paul Dales, senior U.S. economist with Capital Economics. "It may be only a matter of time before it hits the wealthy."
(Excerpt) Read more at breitbart.com ...
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How about 2006? Why not 2006? Or 2007?
Why not 2008? That was the year the recession officially started right? The year the real-estate bubble popped?
Oh, wait. I know.
It's because housing prices in 2003 weren't as high as they were in subsequent years. The AP is cherry picking a year that fell before the housing collapse, and they had to go back to 2003 to find one that had prices lower than their cherry-picked sample shows today! Of course!
But, by that logic, they could have gone back to... I don't know... how 'bout 1940? In 1940, the median home price in the US was... I have it here... $30,600! And that price has been adjusted to the 2000 dollar!
Just think of it! Compared to 1940, why, Obama has made every homeowner almost a millionaire!
This is actually good. It hurts, but it is necessary.
If we accept the data that there was no organic household earnings increases in the ‘00’s and that consumers spent debt, not income, then we need to basically unwind the housing asset class to pre-2001 levels, when the Fed started to inject money into the economy at absurd levels.
In the Tampa area they’ve been below that point for quite a while.
I know, I bought my house then.
Must be old reruns. Check Divorce Court for updates...;-)
In 2003 George Bush took office and home values started climbing.
In 2008 "insiders" knew that 0bama was going to win in November and unloaded.
0bama caused home values to fall even before he was elected and even more after he took office.
Now for the really good news. In numerous areas I've looked at, home prices are now at levels of the early 90’s. In addition, with even tougher mortgage guidelines about to take effect, values are going to continue going lower, leading to even more foreclosures. Also being destroyed are all the business's and people who used to make their livings on Real Estate sales.
Now, to those who aren't homeowners and feel it won't effect them, these lender loses will likely be covered by more tax payer dollars.
If anyone thinks our economy can improve without replacing this component, they are mistaken.
The roots ofthe collapse go much farther back than that.
To the regime of Jimmy Carter, under whom housing appraisors no longer had to index a home against the population density, the number of homes in the area, and the median income in assessing the value of a home.
It became okay to simply compare the selling price of recently sold comparable homes. the unstable and out of control fluctuations in home prices date from this period.
So who's benefiting? In my area, young couples starting out in life can buy a nice home on a single income, so the wife can stay at home with the kids. Before, theyd be spending upwards of 50 % of 2 incomes on monthlies.. Also, some people who could only rent before can now buy, as long as they have a job.
Home prices were flat between 1989 and 1999. No where is it written that housing is guaranteed to be the way to make an easy buck. For every person who gets screwed, somebody else benefits. Such is life.
>> This is actually good. It hurts, but it is necessary.
Here in Northern Virginia (Washington DC Metro area), house prices are steadily climbing. Fortunately we bought our house ten years ago. I’ve got at least 350K in equity, conservatively.
No where is it written that housing is guaranteed to be the way to make an easy buck. For every person who gets screwed, somebody else benefits. Such is life.
I see it that way too, and I'm one into some (but not disastrous) loss. It was clearly crazy the way housing was going, largely by virtue of Fannie Mae, liberalism, etc. To be a conservative means to be conservative, not easy Madoff-type greed. I see it that way also with the stupid discipline of "Economics."
The United States, its phony political leaders, and apparently the majority of adult juveniles who cannot see beyond them, has really really lost it.
The Tea Party the only current hope.
While I agree that a free market provides for when someone loses someone else gains, the current market is a government controlled market, not a free market. When the option of financing is essentially eliminated from a marketplace, cash is truly king and prices of the product will fall. Add that to a terrible economy and watch housing prices continue their plunge.
Who's truly benefiting is a great question. Sorry to say, what we're in the midst of is a transition from a nation of home ownership to a nation of renters.
WHO is benefiting??
It seems to me that this is similar to the government taking over the student loan business. They OWN that, 100%. Now, the most frequently mentioned number of 90% tells me that this IS the benefit. The GOVERNMENT will control who lives where. There will only be 10% of houses that WON’T be owned by the government. IF it even stays that way. Maybe it will only be 1%, and the rest of us will be at the unmerciful whims of bureaucrats in control of our lives.
That is what I wonder about, there MUST be an end game to this. AND not to our benefit, either.
AND just like the student loans will be passed onto their children, if they have any, I would bet that the housing loans will be a ball and chain around anybodies foot until every last cent by their great grandchildren is paid.
That is what I fear.
Ummm. It used to be you had to put 20 % down to buy a house, thats how it is in Canada pretty much. If you can pony up that much you can pretty much get a loan, period. ..
Sorry, but the Ponzi scheme days of house flipping are, rightly, over.
I've heard the Canada argument before. But, the US housing market is not the Canadian market and as bad as their Government can be, they don't have Barney Frank, Chris Dodd and Andrew Cuomo writing lending rules and procedures.
Regardless of you feeling the housing market was a Ponzi scheme (then, what would you call the Stock Market?), the tremendous amount of equity lost by regular homeowners is bad, not to mention all the industries which are suffering because of the continued declines and the overall effect on the Nations economic health.
I've said it before, as goes the housing market so goes the economy.