Home Prices Fall in 23 of 25 U.S. Metropolitan Areas (Sacramento, Las Vegas, San Diego lead drop)

[marmar]

from Bloomberg:



Home Prices Fall in 23 of 25 U.S. Metropolitan Areas (Update1)

By Bob Ivry

July 7 (Bloomberg) -- Home values fell in 23 of 25 U.S. metropolitan areas in April, according to Radar Logic Inc., as sales of a record number of foreclosed homes pushed prices down.

The Sacramento, California, region saw the biggest drop, with prices falling 31.7 percent from April 2007. Sacramento was followed by the Las Vegas area (29.9 percent), San Diego (28.1 percent), Phoenix (25.5 percent) and Los Angeles (23.4 percent), Radar Logic said.

``Prices are going down so fast they can't go down much longer,'' said Christopher Thornberg, president of Beacon Economics LLC in Los Angeles, who predicts a total decline of 30 percent nationally in the housing recession. ``We've never seen prices fall like this.''

Nevada and California were the states with the most homeowners entering some stage of foreclosure in May, according to RealtyTrac Inc. of Irvine, California, a seller of real estate data. Foreclosures, which reached a record high of 2.47 percent of U.S. homes in March, sell for less than occupied homes and lower the average selling price of all homes by 6 percent, according to Lehman Brothers Holdings Inc. economists Michelle Meyer and Ethan Harris. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aUKNXKCNLhGA&refer=home

[Journeyman]

1. "Never seen prices fall like this." Eh, never saw 'em rise like they did, either. . .

but where was Christopher Thornberg and his jeremiads when the disaster was developing. Too busy cashing checks to question the dynamics behind it all would be my guess.

[Warpy]

2. Most of the people who got caught up in it

were blinded by the dollar signs they thought would be inevitable as houses continued to appreciate faster than they could squander the paper profits on their credit cards.

That's the problem with a bubble market. Everybody in it thinks it will last forever.

[Journeyman]

3. Yeah. But I'm an idiot, single-digit iq and all that, and I saw the danger signs. . .

why didn't these fuckwads see the same, if for no other reason than self-preservation? I've got enough smarts to stay out of ponzi schemes. You'd think those involved would be smart enough to realize the limited nature of their ongoing mistake. But of course, you're right -- no one believes it's going to come crashing down, least of all those who are enjoying the good times. The pisser, of course, is all the rest of us will suffer along with the guilty. I just hope the Christopher Thornbergs of the world suffer proportionate to the extent of their involvement.

[Warpy]

4. My dad died in early 2006

and I drove around the block and counted "for sale" signs in his area. I then looked at the comps I'd been given, sneered, and lowered the price 10%, sold in a week. People thought I was NUTS. Then the bottom dropped out.

It only took a room temperature IQ to see the warning signs. What it took was paying attention to them as they started to appear. In my case, it was more than 3 signs per block.

The problem with being caught up in a bubble mentality is that the signs, literal and figurative, are dismissed as unimportant because that bubble will last forever, act now, tomorrow it will all be too expensive to touch.

[aspergris]

6. Exactly. The greater fool theory

Generally speaking, regardless of which asset class you are referring to, you want to buy it when people DON'T like it and sell into strength (when everybody loves it).

Recall that my investment hero Jim Rodgers has been calling for a commodities bubble (oil, metals, grains) to develop for a DECADE. Man, was he on track with that one.

Declining home prices are a GOOD thing. I realize that's contrarian, but I *am* a contrarian, and that's the best way to be in the capital markets.

The bubble got ridiculously parabolic (as they inevitably do) and prices coming back is good - it means they get affordable again. Unfortunately, I am in the Seattle area, and our bubble has yet to pop, but it is showing poppage signs - shouldn't be long.

For those who didn't overleverage and get involved in ridiculous loans, declining home prices are not a big deal.

[melody]

5. And my crappy little shack is paid for

All my friends in their McMansions can sneer all they like. The price could drop by 3/4s and we'd STILL get back what we paid for it.

Peace of mind is worth more than all the swimming pools in the world.

[slackmaster]

7. There is still plenty of room for prices to come down in San Diego

In my area resale homes peaked around January 2006, but my place is still valued at about 3.5 times what I paid in December 1994.