Home prices still falling
Atlanta saw the biggest price drop in the last year, followed by Minneapolis.
This post comes from AnnaMaria Andriotis at partner site SmartMoney.
Data released today by the S&P/Case-Shiller Home Price Indices shows that, nationally, home prices posted an annual decline of 3.9% in the third quarter compared with a year ago. But home prices fared far worse in cities that up until recently haven't been associated with the housing crisis. Post continues below.
"The poster children of the foreclosure problems are no longer the ones declining the most," says H. Pike Oliver, senior lecturer at Cornell University's Department of City and Regional Planning.
Homeowners in Atlanta have seen the biggest price drops over the past year -- down a whopping 10% year over year -- followed by Minneapolis, where home prices are down 7.4%. Also, home prices in Seattle and Portland are down 6.5% and 5.7%, respectively.
These cities are dealing with slower economies, high unemployment and foreclosures, says Maureen Maitland, vice president at the S&P Indices.
Experts say these price declines underscore a new phase to the housing crisis. While cities in Florida, Nevada and California are still posting losses, experts point out that their problems were largely caused by an overhang of inventory, homes that are now slowly being purchased by buyers. Instead, the cities where home prices are falling the fastest now are dealing with local economies that have stalled.
"What's happening now is the regions are beginning to show their differentiation -- some have more sound economies than others," says Maitland.
For home sellers, the bottom line is mixed. Would-be sellers who've been sitting on the sidelines until the market improves will have to determine how much longer they can wait, say experts. For the most part, home prices in 2012 could continue to drop or at best stay stable, says Jed Kolko, chief economist at real-estate listing site Trulia.
The sellers with the most leverage are those located in or near major cities, says Oliver, who says home prices there have been more stable than those in the suburbs. Homebuyers, he points out, are increasingly looking to purchase a home near major work centers that also helps them avoid long commutes and paying for soaring gas prices.
On the buying side, there appears to be more opportunity. While the market remains favorable for first-time homebuyers, it's also opening up to move-up buyers -- those who have a home and are thinking about selling in order to buy a newer, bigger one, says Oliver. If they're living in an area that has recouped some of its losses, they might be able to sell their home at a higher price than they could during the past couple of years while buying a larger home at a still depressed price, he says.
But consumers who are considering purchasing a home should plan to stay at least five years, experts say. Inventory remains high -- there are about 3.3 million existing homes on the market, according to the National Association of Realtors -- and it could rise if foreclosures pick up and when banks ultimately sell the foreclosed homes they've been holding on to, says Kolko. The result could be more losses in home values to come.
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Just wait until peak oil hits and unemployement doubles into a depression. Why not? I mean, with our goverment moving as slow as snails to support a new economic infrastructure that doesn't depend of the rubberized gas powered auto why wouldn't it happen. Home values where inflated in 98 and when they rose 3 fold they became even more ludicrous. Three decades of stupidity and the general public just doesn't get it. Home ownership is a scam the government and the banks hold over us and by extension we hold over ourselves. I say let it burn to the ground. Let america go back to its roots as a nation of principle. If you can't afford it, you can't have it.
Home prices are not going to stabilize until wages for the middle class stabilize or begin to rise.
There is far too much cheap labor in this country for the available jobs and as long as wages are at a level that won't allow home ownership, home values will decline.
There isn't a shortage of home buyers in America. There's a shortage of income!!!! Fix that problem, and you have solved the housing crisis.
How? Redistribution of wealth. When 20% of the population controls 84% of the wealth, something has gone horribly wrong. Trickle down economics is a catastrophic failure!!! It hasn't worked and it won't work. Because greed is far more powerful than compassion.
It has ruined the Free Enterprise System, Capitalism and the American dream! But hey, let's not change anything. That just wouldn't be American!!
To get out of this mess taxes will have to be raise ( temporarily ) , cuts made to the public employee wage and benifits packages at the least for new hires . medicare cuts . medi cal cuts, EVERYTHING .
We can no longer have what we want and think its what we need . and put it on a credit care or borrow on the house to get it . The goose has stopped laying golden eggs for sure .
Things like folks being able to retire at 55 or 60 and make more than they were making when the worked has got to stop . I am 84 and I never thought " how can these young buy these fancy homes and make the large payments it cant last " and it didnt. IMO it is all due to the relaxing of credit . I can remember when my kids were geting pre approved applications for credit cards and they were not even out of school !!!!!! It was insane
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Sure, you love your stuff. Keep buying it, but don't get sucked into paying a premium when perfectly good cheaper alternatives are available.