Home Values Plunge 27% From Peak!
Home Values Going Down The Drain.
Great article from Rolfe Winkler CFA.
Now that unemployment has kicked into a higher gear, more folks will be defaulting on mortgages, meaning house prices are likely to continue their slide in coming months. As they do, household and bank balance sheets will continue to deteriorate. Said another way, their leverage ratios will continue to increase as the falling value of their assets wipes out their equity.
Its clear that if Realtors are going to be relevant in the real estate industry they must know how to list and sell short sales. Short sales are one of the best opportunities for Realtors to help others and make money in this market. Watch the FREE Agent Short Sale Secrets Video now. Download the FREE Agent Short Sale Secrets crash course NOW.
The first chart includes data through Dec ‘08., which, if you look closely, extends to the right of the “Oct 08? label (Click on charts to enlarge):
The WSJ discusses the data:
Home prices continued their multiyear slide in December, according to the S&P/Case-Shiller home-price indexes, as both the 10-city and 20-city index posted record declines, making 2008 the second-straight full year of declining home prices.
The Sun Belt continues to be hit hardest, and nationally, home prices are at levels similar to late 2003…
Both composite indexes and 13 of the 20 metropolitan areas have reported consecutive record year-over-year declines since December 2007.
As of December, average home prices are down 27% from their mid-2006 peak. The 10-city and 20-city indexes have fallen every month since August 2006, 29 straight.
Both the 10-city and 20-city indexes fell 19% in 2008. December’s drop marks the 10-city index’s 15th-straight monthly report of a record decline.
The indexes showed prices in 10 major metropolitan areas fell 2.3% from November, while home prices in 20 major metropolitan areas fell 2.5% from November.
Yet again, none of the regions could stave off a decline from November to December. Month-to-month decliners were led by Phoenix and Las Vegas, which fell 5.1% and 4.8%, respectively, and Minneapolis, which dropped 4.6%.
And for the ninth straight month, no region was able to avoid a year-over-year decline. Phoenix and Las Vegas were again the worst performers, with drops of 34% and 33%, respectively, from a year earlier. San Francisco followed, with a decline of 31%. Phoenix is down 46% from its peak in June 2006.
Compared with a year earlier, Denver and Dallas again had the best relative performance, with annual declines of 4% and 4.3%, respectively.
The data in the charts is published by S&P Case Shiller here.
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