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National Home Prices Double Dip
CNBC ^ | 05/05/2011 | Diana Olick

Posted on 05/05/2011 5:34:58 AM PDT by Rational Thought

It's official.

Home prices have double dipped nationwide, now lower than their March 2009 trough, according to a new report from Clear Capital.

It was inevitable, and it was predicted (by me for sure) that a surge in sales of foreclosed properties and a big push by banks to facilitate short sales would force home prices down dramatically.

Sales of bank-owned (REO) properties hit 34.5 percent of the market, according to the survey, resulting in a national price drop of 4.9 percent quarterly and 5 percent year-over-year. National home prices have fallen 11.5 percent in the past nine months, a rate not seen since 2008. Add short sales, where the bank allows the borrower to sell for less than the value of the mortgage, and prices have nowhere to go but down.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: economy; housing
Media and Government officials can attempt to downplay or spin this, but it's not going away. It's getting worse.

So goes the Housing Market so goes the overall Economy.

1 posted on 05/05/2011 5:35:01 AM PDT by Rational Thought
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To: Rational Thought

Bad time for my real estate business. My backup career as a pole dance isn’t looking good either.


2 posted on 05/05/2011 5:38:27 AM PDT by DaxtonBrown (HARRY: Money Mob & Influence (See my Expose on Reid on amazon.com written by me!))
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To: Rational Thought
 

Got Liar Loans?

 

Thank the progressively demoralized Rainbow "Fithcally Conthervative" Log Cabin interior decorator jackwagons and their "partners". They deserve it.

3 posted on 05/05/2011 5:38:34 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Rational Thought

No kidding.. My house was worth $311K when I boaught it 4 years ago, now the value is down to $250K.. This sucks.


4 posted on 05/05/2011 5:39:14 AM PDT by scbison
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To: scbison
Sad, but you're one of the lucky ones in comparison.
5 posted on 05/05/2011 5:41:33 AM PDT by Rational Thought
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To: scbison

>>My house was worth $311K when I boaught it 4 years ago, now

Relax, in a few years it’ll probably be “worth” several million Baracki InlflatO bucks.


6 posted on 05/05/2011 5:43:46 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: LomanBill

true..


7 posted on 05/05/2011 5:45:04 AM PDT by scbison
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To: Rational Thought

This is not just a bad loan issue. Most everybody who bought during the bubble, paid inflated prices. There are many millions of folks stuck with under-water loans on homes that are deflated in value.

Two of my kids bought when prices had clearly started down. They had no idea values would continue down this far and both are now stuck.


8 posted on 05/05/2011 5:49:32 AM PDT by umgud
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To: Rational Thought

If these are bank owned, then the price drop is imaginary. These bank homes have been gutted, have had no maintenance for years and the buyer has very little inspection options so consequently the homes are priced at deep discounts.


9 posted on 05/05/2011 5:50:30 AM PDT by Raycpa
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To: umgud

I sold at the peak and told my kids NOT TO BUY!!!

Of course, one knew better and bought anyway. Ugh.


10 posted on 05/05/2011 5:54:11 AM PDT by SC_Pete
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To: Rational Thought

Idiots in government thought they could make up their own laws of supply and demand. The market will find its own bottom and it is much lower .


11 posted on 05/05/2011 5:58:48 AM PDT by org.whodat
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To: Raycpa
The problem is the bank owned properties are the market, dragging down prices of other privately owned sales. Add to this the incredible number of bank owned properties which have yet to hit the market, combined with unavailable financing and a weak employment picture, and we're certain to see much lower prices in the months ahead.

What's still not talked about is these lower prices are likely to further increase existing foreclosures, due to more owners walking away from underwater properties.

12 posted on 05/05/2011 6:00:55 AM PDT by Rational Thought
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To: scbison
My house was worth $311K when I boaught it 4 years ago, now the value is down to $250K
Did you buy it as an investment or as a place to live, i.e. a home? If you're not planning on moving real soon I wouldn't worry about it. Things happen.
I bought a house in 1977 (7% mortgage) and planned on moving in three or four years. But by the early 80s Carter's economics had driven mortgage rates up to 15% and more ... no move.
Thirty three years later I'm still here, but with no mortgage since 1997, I've put a lot of money into the bank.
13 posted on 05/05/2011 6:02:17 AM PDT by oh8eleven (RVN '67-'68)
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To: Rational Thought

What better way to rip off the middle class than to inflate house prices and then let the bubble they created burst, as all bubbles do?

Bubbles are created by easy credit. Who controls that? The banksters who control the credit. Their lackeys in government help, of course. The government encourages everyone to take the crack and get screwed.


14 posted on 05/05/2011 6:03:40 AM PDT by MichiganConservative (We would all be better off if the federal government just decided to end itself.)
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To: Rational Thought

It seems to me we have two distinct markets and one average.

Many families are going to avoid the bank owned properties and short sales because of the risks and the complications (getting these banks to the closing table and getting good title is very hard).

Other families who take the risks and persevere will often be rewarded for their risks.

I agree the appraisals for the “good homes” are going to be hard to get but that doesn’t mean the value of those homes are down, it means the comparatives are not truly comparative.

The one getting hurt will be the one who needs to unload the home when many buyers have lower cost options. Their hold time will be greatly increased.


15 posted on 05/05/2011 6:06:12 AM PDT by Raycpa
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To: scbison
My house was worth $311K when I boaught it 4 years ago, now the value is down to $250K.. This sucks.

Sorry to hear that. With inflation on the rise, the Fed may need to tamp things down by raising interest rates. Don't know if this is an absolute, but I read that for each point interest is raised, it shaves off another $10K from the sale estimate of your home-ugh.

16 posted on 05/05/2011 6:31:34 AM PDT by randita
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To: Rational Thought

I have to say....as I walked around new housing developments five or six years ago, and every time I looked at a house my gut reaction was “it’s not worth that much”....probably is telling me that they were not worth that much.


17 posted on 05/05/2011 6:56:55 AM PDT by Buckeye McFrog
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To: Rational Thought

I sold my house at price in 2009.

Now I’m looking to buy a house valued at 156K for 125K.


18 posted on 05/05/2011 6:56:55 AM PDT by struggle ((The struggle continues))
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To: scbison
My house was worth $311K when I boaught it 4 years ago, now the value is down to $250K..

Our house value dropped over 16% in just the past year. It's dropped almost 40% from four years ago.

19 posted on 05/05/2011 7:49:13 AM PDT by Arrowhead1952 (The American taxpayer cannot support the tax and spend habits of DC.)
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To: Raycpa

“If these are bank owned, then the price drop is imaginary. These bank homes have been gutted, have had no maintenance for years and the buyer has very little inspection options so consequently the homes are priced at deep discounts.”

Sorry but not true. We just purchased a fannie mae owned property. It is a 4 year old home in good shape and included a $8,000 water softener. The only thing missing was the kitchen appliances. Most of the foreclosures we looked at were not trashed. It really depends on what the previous owner and their renters did.


20 posted on 05/05/2011 8:10:57 AM PDT by lodi90
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To: Rational Thought

The truly scary thing is that even before a double dip recently built housing is already way below new construction cost. A further decline with low interest rate loans available shows just how fubared we really are.


21 posted on 05/05/2011 8:16:29 AM PDT by lodi90
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To: lodi90

We also purchased one and we were only allowed limited access. For example the heating system had the water removed as well as the regular pipes. We had to take the chance that there was no damage to the pipes and the furnace or the sewer system. If there was we could have incurred 10’s of thousands of dollars. The bank sold as-is and felt they priced it low enough that such things should be covered.

Also, the purchase process was difficult. We never knew until the closing that we actually had a deal.

It also took as 4-5 months and thousands of dollars to make the necessary repairs and upgrades for it to be usable.


22 posted on 05/05/2011 8:40:25 AM PDT by Raycpa
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To: lodi90

Here in Yuba City CA we have foreclosures that are trashed and many in good shape. I can’t say with certainty but there seems to be a trend.

Many of the foreclosed homes that were badly damaged during the repossession were owned by Hispanics. Many of the homes owned by eastern Indians (Sikhs mainly) were turned over in good shape, with maybe some kitchen appliances removed.

I know this sounds racist or something but that is what I noticed during my home search in 2008. Many of the foreclosed damaged homes had been owned by people with Spanish surnames. Many of the foreclosed homes that weren’t damaged often had the paint shemes that seem to be popular with the Sikhs like painting one wall in the living room brick red, etc.

Anyway, 2 very different cultures it appears. Lots of vindictive damage from previous hispanic occupants vs just peaceful surrender of homes by the Sikhs. So investors looking for homes here in Yuba City really get a deal on the previous Sikh-owned homes as they are not generally damaged.

As far as home prices, they seem to be still creeping down here in Yuba City but not very fast. I bought my home at the end of 2008 after average prices in Yuba City fell 28% in one year. I got lucky and was careful, so I’ve only lost about 15% on my home so far, and so far it is still better than renting between my 5% mortgage rate and home tax deduction. I could never own my very cool German Shepherd in an apartment or have a garage for my sports car.

My house is a HOME, and an inflation hedge, but is meant to give me a beautiful place to live in a wonderful neighborhood, not meant to be an investment first and foremost. I think it is foolish to buy your house primarily as an investment.


23 posted on 05/05/2011 9:34:49 AM PDT by Freedom_Is_Not_Free (Don't confuse Obama's evil for incompetence.)
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To: Rational Thought

The link below goes to a site that shows very interesting home price trends for the past 20 years by city. Neat information.

http://forecastchart.com/home-price-index.html

There is a lot of other interesting information at the site beyond just the historic house price trend in the link above.

The link for the main site is below:

http://forecastchart.com/

Obviously use at your own risk as I can’t vouch for any of the information but it is fun to play with.


24 posted on 05/05/2011 9:40:03 AM PDT by Freedom_Is_Not_Free (Don't confuse Obama's evil for incompetence.)
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