Real Estate has that name because, traditionally, it's an extremely safe repository of your money because, unlike other investments, it's real; they used to say "they're not making any more of it!".
We have seen, over the past couple of years that it wasn't quite as "real" as we imagined. Yes, the Real Estate market has always been subject cyclical fluctuations, but the big run-up in values proved to be just another bubble that is seemingly not yet done with us.
Home prices fall in nearly all major cities, heightening fears of double dip
Home prices slipped in nearly every major metropolitan area in November, with a few cities hitting their lowest levels since prices peaked about four years ago, according to a closely watched index released Tuesday.
From October to November, prices fell in 19 of the 20 metro areas tracked by the Standard & Poor's/Case-Shiller index, widely considered a gauge of the housing market's health. The only exception was San Diego, where prices were basically unchanged.
Only four areas posted year-over-year gains in November, including Los Angeles, San Diego, San Francisco and the Washington region. But in the aggregate, prices dipped 1.6 percent in November from the same time a year earlier, falling in 16 cities.
The nine cities that hit their lowest annual levels since the housing bust started were Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland, Ore., Seattle and Tampa.
The 20-city index is now about 3 percent above April 2009 levels, "suggesting that a double dip could be confirmed before spring," said David Blitzer, the index committee's chairman.
This "double dip" in real estate represents one of the worst fears of housing analysts and is developing just as it appeared that the overall economy was recovering. For now, many economists expect prices to keep slipping at least through the first half of the year, dragged down by the nation's large volume of foreclosures and high unemployment rate.
The Washington region has bucked the trend because a healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing. Home values climbed 3.5 percent in November from a year earlier, but they were almost unchanged from October and are well off their peak.
The Case-Shiller index measures repeat sales of single-family homes and reflects a rolling three-month average, so the November data capture transactions that closed in October and September, as well.
As this post is titled, "The Home is the Largest Investment Most Americans Have". That's true, but this continuously bursting bubble could not be coming at a worse time; with unemployment at some 10% now, the problem will not only worsten, it will likely spread.
In 2010, home foreclosures topped 1 million for the first time in history, topping the previous record of 918,000 set in 2009. In 2011, that number is expected to go even higher. Perhaps considerably higher.
One has to wonder the overall effect this continued situation will have on the whole of the economy. These homes that have been foreclosed have dropped drastically in value and are still dropping. Mortgage companies are not only losing money, their likely stuck with a lot of these properties because people just aren't buying:
New-home sales in 2010 fall to lowest in 47 years"Economists say it could be years....." seems to be forecast regarding all of our current economic woes, including unemployment which makes talk of "recovery" painfully laughable.
WASHINGTON (AP) -- Buyers purchased the fewest number of new homes last year on records going back 47 years.
Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said Wednesday. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming.
The year ended on a stronger note. Buyers purchased new homes at a seasonally adjusted annual rate of 329,000 units in December, a 17.5 percent increase from the November pace.
Still, economists say it could be years before sales rise to a healthy rate of 600,000 units a year.
Older people are watching the value of their homes erode by the day, if they're fortunate enough to have a job. Younger people, who are suffering the highest rates of unemployment, simply don't feel comfortable enough about the economy to make such an investment, even if they're working.
So, is this the "hope" or the "change"?
No comments:
Post a Comment