What Is Going On In YOUR Housing Market? Popularity: 1% [?]

HREU Students here is the promised city-by-city break down of the Case-Shiller home-price index.

The S&P/Case-Shiller home-price index, a closely watched gauge of U.S. home prices, continued to post declines in February but the pace stopped setting records after 16 consecutive months.
Click the image for an interactive map of home-price declines.

In the 20-city index, no area experienced year-over-year price gains, the eleventh straight month that has happened. Further, none of the cities managed to avoid month-to-month declines for the fifth month in a row.

Phoenix, Las Vegas and San Francisco continued to lead year-over-year decliners, with drops over 30%. Cleveland posted a large month-to-month drop, as the rate of decline accelerated there. The rates of decline also accelerated in Charlotte, New York and Washington.

Realtors, clearly more sellers who will need the services of an agent who knows (really knows) how to list and sell short sales. Watch the Free Agent Short Sale Secrets video now…then download the FREE Agent Short Sale Secrets book.

Dallas, Denver, Cleveland, Boston and Charlotte managed to avoid double-digit year-over-year declines, while New York moved posted a year-to-year drop over 10% for the first time. Measuring from each market’s peak, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 50.8% from its peak in June of 2006. All of the 20 metro areas are in double digit declines from their peaks, with seven — Detroit, Las Vegas, Los Angeles, Miami, Phoenix, San Francisco and San Diego — in excess of 40%.

“We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” said economist Joshua Shapiro of MFR Inc. “After all, in the seven years leading up to the peak in July 2006, the national 20 city home price index jumped by 155% (126 index points). So far, this index has dropped by 31% (63 index points) in the 30 months since the peak. By our estimation, the composite 20 city index is perhaps two-thirds of the way through its ultimate total decline in this cycle.”

Home Prices, by Metro Area

Metro Area	February 2009	Change from January	Year-over-year change
Atlanta	106.65	-2.50%	-15.30%
Boston	148.77	-1.30%	-7.20%
Charlotte	118.94	-1.60%	-9.40%
Chicago	126.3	-3.40%	-17.60%
Cleveland	97.76	-5.00%	-8.50%
Dallas	112.39	-0.30%	-4.50%
Denver	120.22	-1.70%	-5.70%
Detroit	74.6	-3.80%	-23.60%
Las Vegas	121.06	-3.60%	-31.70%
Los Angeles	163.16	-2.00%	-24.10%
Miami	154.28	-3.00%	-29.50%
Minneapolis	116.39	-3.10%	-20.30%
New York	178.16	-1.60%	-10.20%
Phoenix	111.89	-4.50%	-35.20%
Portland	150.88	-1.90%	-14.40%
San Diego	146.82	-1.00%	-22.90%
San Francisco	120.39	-3.30%	-31.00%
Seattle	152.12	-1.50%	-15.40%
Tampa	145.25	-2.70%	-23.00%
Washington	168.02	-2.30%

-19.20%

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The 25 Worst Real Estate Markets For 2009…Predictions..(Tell us what you think) Popularity: 1% [?]

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$500,000 Is The New $1,000,000 | $1Mil Is A Lot Of Money Again | Realtor Coaching And Training Popularity: 1% [?]

Remember when owning a million dollar home was seen as the birthright of only movie stars and royalty?

Well, that all changed during the loosey-goosey credit years. It seemed like it was every Americans national duty to be in debt, have a huge mortgage and maxed out cards. At least that’s what millions of Americans were lead to believe. Everyone was ‘rich’…at least on paper. This paper wealth gave permission for people to embrace their post manufacturing based economy label…as a consumer. And , do American ever know how to consume.

Americans have an insatiable desire for homes. Its part of this American pathology to always want a better home…heck, owning a home is ‘The American Dream’…owning a $1,000,000 home just seems…somehow…dreamier.

So, Americans went on a buying spree. We felt rich, had access to easy credit..nothing was out of reach. It was all psychological. And during the recent boom years, Americans became reckless consumers, buying cars, houses, clothes and much more that they couldn’t really afford. The dream of a $1 million home, once so distant, became tantalizingly reachable. Afterall, that new leased BMW had to be housed in a new garage of the newest, must have community.

Drive through the post-boom housing markets across the US and one thing becomes clear. The party is over. Las Vegas was the prototypical housing boom story. New developments were announced early every week. People would stand in line to toss down their hard borrowed cash for a place in line for the right to ‘invest’. Luxury condo buildings are now nearly vacant. The gold-plated golf course  laden communities with tree lined streets are now being sumplemented with endless “For Sale” signs…now those signs are all adorned with the ominous subtitle “Foreclosure, Bank Owned” or “Short Sale”. In Riverside California there are literally acres of ‘Master Planed Communities’ that have been left to decay.

Other asset prices are returning from orbit as well. In the credit induced, consumer drunk boom times what were once considered to be luxuries became mandatory house hold staples. In Southern California’s  sea side ‘Gold Coast’ which comprises some of the most beautiful and expensive real estate in the world, it was common to see oceans of ultra expensive exotic cars. Matter of fact, the top selling Lamborghini dealer in the world was located in this area. Even this elite financial class of consumers are subject to the crash. Exotic cars, luxury ‘assets’ are now selling for 40+ less than they were just 90 days ago. To put that into perspective, that Lamborghini dealer, the #1 selling Lambo dealer in the world, closed its doors recently.

Housing became the de-facto place to splurge. Home priced skyrocketed. In less than 36 months some real estate markets doubled in value.

Now that has all changed.

In 2006, that $1,000,000 house that had 14 offers in the first day it was offered for sale…is now languishing on the market. The current asking price is $575,000 with no takers. Because those sellers re-financed and spent all of their equity they are now hopelessly ‘upside down’ in their homes. Only a skilled short sale agent will save these sellers from a foreclosure. Of course, agents who have taken the time to learn how to help sellers with a short sale are in huge demand.

While certain pockets, such as Manhattan, San Francisco and Boston, remain high, real-estate prices around the country have fallen dramatically. The downside to this, of course, is that many people now owe more money on their home than their home is worth. The upside is that valuations are much more realistic — and affordable. Yesterdays $1,000,000 home is todays $500,000 home..and falling.

Until recently, sellers in wealthy neighborhoods were somewhat protected from the subprime credit crisis and were still drawing buyers with high salaries, good credit scores and a cushion of savings. But the problems worsened after global financial-services giant Lehman Brothers collapsed on Sept. 15. Credit markets froze, corporate giants laid off thousands of highly paid workers, and the stocks that padded the portfolios of the wealthy plummeted.

Case in point. In La Jolla, California where the average sales price is still around $1,000,000. It’s common to have international buyers in this market who are investing in their 3rd of 4th homes. After the AIG collapse there were dozens of ‘In Escrow’ homes fall out of escrow. In other words, even the most well heeled buyers weren’t willing to close on homes in this economy. Many walked away from huge earnest money deposits.

Even once seemingly impervious markets such as New York City, Florida and California, which had attracted well-heeled international buyers looking to take advantage of a weak dollar, began to struggle as the global economic slowdown washed over Europe, Asia and even the Middle East.

Most economic forecasts are now calling for this seemingly endless housing correction to bottom as late as 2013. The original forecasts of a housing bottom in 2009-10 didn’t take into account the global recession and massive job losses.

Barron Rothschild said, ‘When There Is Blood On The Streets, Buy Real Estate’.

With that said, its probably not a great time to buy real estate unless you plan on staying in the home for at least 5 years. It will take at least 5 years for any sort of sanity to return to the housing markets. Smart buyers (and investors) are looking for bargains. As prices for homes continue to fall a new breed of buyers is entering the market. Buyers with significant downpayments, good jobs and credit. Buyers who aren’t buying to ‘make a fast buck and move up’ but, buyers looking to settle into a community and make it their home.

And longer term? Over the next 10 to 20 years, housing economists expect prices will rise again — but, on average, probably not nearly as much as they’ve averaged over the past decade. That isn’t to say that some places won’t experience booms (and busts). But, the experts say, you should generally expect house prices to rise just a bit more than inflation and roughly in line with household income.

Karl Case, an economics professor at Wellesley College whose name adorns the S&P Case-Shiller home-price indexes, has studied U.S. house prices going back to the 1890s. Over the long run, he says, home prices tend to increase on average at an inflation-adjusted rate of 2.5 percent to 3 percent a year, about the same as per capita income. He thinks that long-run pattern is likely to continue, despite the recent choppiness.

Other experts make similarly modest predictions. William Wheaton, a professor of economics and real estate at the Massachusetts Institute of Technology, says he expects house prices to increase at a rate roughly one percentage point higher than inflation over the long term. Celia Chen, director of housing economics at Moody’s Economy.com, a research firm, expects house prices to increase an average of around 4 percent a year over the next couple of decades.

Some experts say it’s a bad idea to count on your home rising in value at all. People should think of their own homes mainly as places to live, not as investments, advises Kenneth Rosen, chairman of the Fisher Center for Real Estate at the University of California, Berkeley. Sure, home mortgages provide tax benefits, and most homes appreciate in value over the long run, he says, but there is always risk.

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Housing Crash Turns to Housing Depression | Drop To 2004 Values | Case-Shiller Housing Index | Realtor Short Sale Coaching and Training Popularity: 1% [?]

As we have been reporting on this blog for nearly 2 years….our Realtor Coaching students know this…the housing crash won’t reach bottom until homes return to pre-bubble prices. In other words, nearly all ‘Bubble-Appreciation’ will be wiped out before the market stops this seemingly never ending crash…

Clearly, for Realtors being a Short Sale Listing Specialist and and REO Listing Agent are the two best growth areas for at least the next few years.

According to the S&P/Case-Shiller home prices indices, released Tuesday morning, prices in 20 key metropolitan areas fell 18.6 percent during Sept., while a 10-city composite index registered an annual decline of 17.4 percent.

From housing wire: A separate national home prices index covering all nine census divisions found a record 16.6 percent decline in the third quarter of 2008, versus the third quarter of 2007, Standard & Poor’s said in a statement. Prices fell 3.5 percent between the second and third quarters, compared to a 2.2 percent drop between Q1 and Q2.

Read that again…16.6% DE-preciation in home values!

In terms of the quarterly national index, home prices have now fallen back to where they were in 2004 — a crash in housing prices, if there ever was one. Through Sept., S&P’s 10-City composite index is down 23.4 percent from its peak, while the 20-City composite is down 21.8 percent and the national composite is down 21.0 percent.

Phoenix was the weakest market, reporting an annual decline of 31.9 percent, followed by Las Vegas, down 31.3 percent, and San Francisco at -29.5% percent. Miami, Los Angeles, and San Diego did not fare much better with annual declines of 28.4 percent, 27.6 percent and 26.3 percent, respectively.

All 20 metros tracked by the monthly S&P/Case-Shiller data posted negative results month-over-month in Sept., with San Francisco posting a 3.9 percent monthly price decline and Phoenix posting a 3.5 percent monthly drop. And all 20 metros also posted negative yearly results, as well;

Hey, there were a couple bright spots from this dire housing report….Cleveland and Boston showed moderate slowing of depreciation if not slight appreciation!

Only Cleveland saw its 1-year change moderate during the month, posting a 6.4 percent annualized decline relative to the 6.6 percent drop recorded in August, S&P said.

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S&P Case-Shiller Housing Index | Realtor Coaching | How to List REOs | Short Sale Training Popularity: 1% [?]

This is the just released Case-Shiller housing index. Combine this report with the recently released NAR report and its clear that we are still very much in the downward depreciation cycle for most of the U.S. Use this information for pricing your listings and working with the lenders for short sales.

It should be obvious that being a REO listing agent in this market is crucial. There are literally thousands of REO homes that need listed and banks who need listing agents.

Here is the Case-Shiller report…

NEW YORK (AP) — Home prices tumbled by the sharpest annual rate ever in August, with little indication of a turnaround in sight, a closely watched index showed Tuesday.

The Standard & Poor’s/Case-Shiller 20-city housing index dropped a record 16.6 percent from August last year, the largest drop since its inception in 2000. The 10-city index plunged 17.7 percent, its biggest decline in its 21-year history.

Both indices have recorded year-over-year declines for 20 consecutive months.

“The downturn in residential real estate prices continued, with very few bright spots in the data,” said David M. Blitzer, chairman of the index committee at S&P.

There are two kinds of Realtors in this market..agents who know how to do short sales and list REOs and those who don’t. Which are you? Download the Free Agent REO Secrets guide book now.

Prices in the 20-city index have plummeted more than 20 percent since peaking in July 2006. The 10-city index has fallen nearly 22 percent since its peak in June 2006.

No city in the Case-Shiller 20-city index saw annual price gains in August — for the fifth straight month.

However, the pace of monthly declines did moderate last month from July, and Boston and Cleveland showed monthly gains from July to August.

Boston, the first city to post price declines in the 20-city index starting in October 2005, has recorded five straight monthly gains in home values.

But on the other hand, Dallas and Denver both showed negative returns in August after four consecutive months of increases.

Price declines in Las Vegas and Phoenix surpassed 30 percent in August, according to Case-Shiller, while prices in Miami, Los Angeles, San Francisco and San Diego all plunged more than 25 percent.

In the Vegas area its now possible to purchase nearly new homes…in Henderson…for less than $100,000. These homes were selling for around $3000 in 2006. A Vegas based coaching client is working with an Ohio based bank to list close to 1000 REOs. The scary part is…these homes have never been listed.

Home prices likely won’t improve in September either as other key housing indicators have shown the housing slump still in full swing. Recent data the government and the National Association of Realtors showed the median prices for new and existing homes both tumbled by 9 percent in September.

What this means is that there will be at least a 30% depreciation in most of the US by the time the markets hit bottom. Expect to see housing prices reach early 2000’s values before the prices level off.

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Money Magazines Outlook for 2009 Housing DEpreciation…. Popularity: 2% [?]

2009 Money Magazine Housing Devaluation Predictions.

Money Magazine recently put out a city-by-city home price forecast as well. Using data from Fiserv Lending Solutions, First American CoreLogic, city and county assessors, and realtors, the magazine determined that U.S. home prices will fall an average of 9.7 percent.

Miami is expected to see the most lost equity. Money Magazine is predicting a 24.9 percent drop. Cities in Texas and New York are expected to fare the best.

Metro Area Median Home Price Forecast May 09 (% chg)
Albuquerque, NM $174,000 -10.5%
Atlanta, GA $205,000 -2.3%
Baltimore, MD $264,000 -12.5%
Boston, MA $363,000 -10.5%
Chicago, IL $279,000 -6.8%
Cleveland, OH $145,000 -4.3%
Denver, CO $254,000 -10.8%
Detroit, MI $120,000 8.6%
Edison, NJ $358,000 -15.8%
Fort Lauderdale, FL $309,000 -22.2%
Honolulu, HI $625,000 -16.2%
Houston, TX $150,000 1.2%
Jacksonville, FL $197,000 -9.6%
Kansas City, KS $148,000 -0.6%
Las Vegas, NV $277,000 -18.3%
Los Angeles, CA $528,000 -16.8%
McAllen, Texas $109,000 4.0%
Miami, FL $329,000 -24.9%
New Orleans, LA $158,000 2.2%
New York City, NY $471,000 -13.2%
Philadelphia, PA $200,000 -11.1%
Phoenix, AZ $237,000 -18.3%
Portland, OR $306,000 -14.7%
Riverside, CA $340,000 -16.9%
Rochester, NY $121,000 2.7%
Sacramento, CA $330,000 -8.9%
Salt Lake City, UT $229,000 -9.8%
San Diego, CA $522,000 -9.7%
San Francisco, CA $840,000 -10.1%
San Jose, CA $750,000 -12.5%
Seattle, WA $430,000 -9.0%
Springfield, MA $195,000 -9.5%
Stamford, CT $562,000 -13.9%

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