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Nickelless
Administrator
USA
5580 Posts |
 Posted - 07/29/2008 : 18:48:54
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Just saw this on Yahoo News:
By J.W. ELPHINSTONE, AP Business Writer
Tue Jul 29, 11:22 AM ET
Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.
The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.
No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.
Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.
Nine metropolitan cities — Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. — posted record declines in May. And the value of housing in Detroit is now lower than it was in 2000.
But a possible bright spot in an otherwise dismal report, seven metros — Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta — showed smaller annual declines.
Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.
Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last metro still showing price gains.
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redneck
1000+ Penny Miser Member
1273 Posts |
Posted - 07/29/2008 : 19:32:08
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Prices are dropping so fast in certain areas that people
are choosing to just walk away.
To them it makes more sense ($cents$)
to have a black mark on their credit rating for several years
than it does to make payments on a investment that is steadily
declining, especially if their loan is a ARM loan.
According to financial experts this is going to put a lot of
pressure on the already strained lending banks,possible causing
them to go under.
Here's a link;
You must be logged in to see this link.
This can't be good for anyone.
My guess is that most of them are probably "flippers" that
got caught when the market topped out.
AS the government is now backing Fannie & Freddie,
"WE the People" will get stuck paying for them.
<
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Bluegill
1000+ Penny Miser Member
USA
1964 Posts |
Posted - 07/29/2008 : 20:24:28
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Although a large percentage, flippers are not the majority of the homeowners who are upside down on their morgage.
That honor belongs to all the idiots who were getting HELOC's (Home Equity Line Of Credit) every year when houses were appreciating at almost double digit annual rates so they could live beyond their means.
What did they do with this money... Put it back into the house to make it more valuable with new kitchens, baths, roofs, etc, etc...
No, they paid off credit cards, then maxed out the cards again and got another HELOC the following year to pay it off, again. Or they squandered it on buying sprees, over priced Harley-Davidsons, plasma TV's, quad runners, etc, etc...
Never once stopping to think that they actually have to pay back all this money they were borrowing.
Oh, they thought they were going to sell the house when it appreciated another 10% and pay everything off. Problem is, if their home appreciated out of their payscale, where on earth did they think they were going to move to when they sold..?
They certainely weren't going to buy an equivalent house, they couldn't afford the one they were already in. They didn't think that one through...
But the phoney good times-the borrowed prosperity, came to an end. The market is now correcting, and will do so for another few years. Those fools not only can't sell their over appraised homes, they are still on the hook for the borrowed funds.
Those of us who were financially responsible, and lived within our means, are going to get stuck with the bill bailing them out. Isn't America great...
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S&P: Home prices drop by record 15.8 pct. in May
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