U.S. home prices fell by a record in January

[N1095A]

Standard & Poor’s/Case-Shiller index shows a 11.4 percent decline

http://www.msnbc.msn.com/id/23500987/

NEW YORK - The Standard & Poor’s/Case-Shiller index shows U.S. home prices fell 11.4 percent in January, its steepest drop since S&P started collecting data in 1987.
The decline reported Tuesday means prices have been growing more slowly or dropping for 19 consecutive months. The index tracks the prices of single-family homes in 10 major metropolitan areas in the U.S.

[Andy]

Re: U.S. home prices fell by a record in January

However, housing prices rose in February for the first time in several months. Saw this on ABC World News last night.

[Andy]

Re: U.S. home prices fell by a record in January

Here it is:
http://abcnews.go.com/Business/story?id=4518323&page=1

[N1095A]

Re: U.S. home prices fell by a record in January

However, housing prices rose in February for the first time in several months. Saw this on ABC World News last night.

I don't see in the article "prices" but rather "sales" rose. Prices are way off from even a year ago. These quotes are from that article. The sales make it sound "good" but it really isn't.

Sales of existing homes rose 2.9%

On the contrary, the article has much to say about prices:

The median home price fell to $195,900, down 8.2% from $213,500 in February 2007. The median means half of the homes sold for more, half for less.

Nationally, sales of single-family homes, condos and town homes rose to a seasonally adjusted rate of 5.03 million, although sales were still nearly 24% below February 2007.

And in California, home sales decreased 28.5% in February compared with the same period a year ago, while the median price of an existing home fell 26.2% to $409,240

[Andy]

Re: U.S. home prices fell by a record in January

You're right - sorry, sales - not prices.

[N1095A]

Re: U.S. home prices fell by a record in January

Yeah they spun it to show a 2.9% sales increase in the beginning, but when you see prices are off 8%+ to 26%+ and then as much as around 25% off compared to Feb. last year, it really shows how much it's hurting.

There will be first-time buyers who get into cheaper homes but the wealth is being destroyed like the stock market in 2000. That's why they're trying this $600 tax rebate, to put discretionary income to roll through the economy.

It will have an effect, but probably small. Much of it will go

a) offshore with oil / gas
b) to credit institutions for interest

two things that hardly reverberate through the economy, in terms of stimulus

[Guest]

Re: U.S. home prices fell by a record in January

Lots of people that invested in several "income properties" like you saw at those seminars are going broke in a big way....they bought up what the big players were dumping........ now the real estate seminars are pushing commercial properties luring people into the market so the promoters can unload the properties they cant sell....... In both cases after a few months the buyers realise they have been scammed when the cash flow turns up negative, but by then its too late......

[Guest]

Re: U.S. home prices fell by a record in January

If you look at the raw Case-Shiller data, you see that the rate of drop in house prices is accelerating. I don't have the numbers in front of me, but 2+% for 3 months in a row, now. That's 25% / year, annualized.

I read somewhere a few minutes ago that (regardless of how the media wants to spin it) we've seen only about 1/4 of the necessary write-downs. We're looking at the rest of 2008, and into 2009 before this economy gets going again.

[RollingAlong]

Re: U.S. home prices fell by a record in January

Quote from Lewis
Lots of people that invested in several "income properties" like you saw at those seminars are going broke in a big way....they bought up what the big players were dumping........ now the real estate seminars are pushing commercial properties luring people into the market so the promoters can unload the properties they cant sell....... In both cases after a few months the buyers realise they have been scammed when the cash flow turns up negative, but by then its too late......

That is what is known as the “The Bigger Fool Theory”

http://en.wikipedia.org/wiki/Bigger_fool_theory

From Wikipedia
The bigger fool theory or greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a bigger fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to some one else for an even higher price.

[Issachar]

Re: U.S. home prices fell by a record in January

That is right RollingAlong and when the music stops, someone is left holding the bag with no chair to sit in.

Issachar