August 26, 2008

FLASH: S&P Case-Shiller housing price index crashes a record 15% nationwide. Vegas down 29%, Swanndive's Phoenix down 28%, Miami down 28%

No, Lawrence Yun and the army of discredited real estate clerks on commission who said it was always a good time to buy a home do NOT want you to see this message.

S&P: Home prices tumble by record amount

NEW YORK - A widely watched housing index released Tuesday showed home prices dropping by the sharpest rate ever in the second quarter.

The Standard & Poor's/Case-Shiller U.S. National Home Price Index tumbled a record 15.4 percent during the quarter from the same period a year ago.

The worst performing city in the index was Las Vegas, where prices plunged 28.6% year-over-year, followed by Miami, down 28.3%, and Phoenix, down 27.9%.

45 comments:

Anonymous said...

Does this mean the Happy Real Estate site is closed?

blumpski said...

But it's different here. My house is special. Real estate is local and every market is different. Don't pay attention to the media - now is the time to buy. Houses always go up in value. You know, they're not making any more land.

Anonymous said...

How does Greg Swann stay in the real estate business?

Swann's Way said...

Just remember that the Swanster's RE business is currently going just great! Just ask him!

Letters of apology to Swann for doubting him are appropriate and appreciated - send them to GregSwann -at- BloodhoundRealty.com!

Anonymous said...

The sad part is this is less of a decline than expected. That means there is some serious sh!t coming down soon. I'm guessing right after election or when McCain takes office.

debt up to my @ss said...

But noeve riche school said that real estate was always a great buy.They told me to tap all my equity and get stated loans to buy more properties.I am shitting my pants right now.I am stiing here with 6 mortgages and loseing 10 grand/ month.Do any of you have an ideas of what I should do?

Anyone have a shotgun for sale?

Anonymous said...

I'm not sure if SwannDive(TM) is selling houses or iphones every post there is iphone this iphone that now

eric in vegas said...

Reprinsentin'

Anonymous said...

time for Cramer to call bottom

...again

Anonymous said...

but but but...

L. Yun

Anonymous said...

It's different in Portland, Seattle, and San Francisco. We're all Hussein cultists and granola bar enthusiasts here. Plus we have the gays. Prices never go down here. We're different and everyone is rich over here because they have an iPhone.

Anonymous said...

So that $300,000 home that the realtors goaded you into buying last year because you "can't time the market" is now $200,000. good advice!

I'll never use a realtor.

SUNNY YUNNY FUKTARD said...

I'M TELLING YA, DIS IS YOUR LASTA CHANCEY TO BUYEE BEFORE PRICEEY'S GO UP 5,000% NEXT YEAR!!!

donald said...

Looks like you bitter renters are losing!! For a second consecutive month, the New York Case Shiller Index has shown a month-over-month PRICE INCREASE!!!! Let's recap for all the bitter renters joing the show already in progress:

April: -8.4%
May: -7.9%
June: -7.3%
July: ???

Anonymous said...

ALAN!! I LISTENED TO YOU!!!!!!!!!

debt junkie said...

Swanny Swanster SwanDive

New tongue twister. Try saying THAT three times fast.

Take it and run said...

"debt up to my @ss said...
But noeve riche school said that real estate was always a great buy.They told me to tap all my equity and get stated loans to buy more properties.I am shitting my pants right now.I am stiing here with 6 mortgages and loseing 10 grand/ month.Do any of you have an ideas of what I should do?

Anyone have a shotgun for sale?"

Pretty simple really. If you have equity lines, max them out, take the cash and walk.....it's that simple. Take the cash, put it in a safety deposit box or buy gold bars with it, and live nicely somewhere that the turds can't find you. Let them take the loss. Their the dumbasses that gave you the loan in the first place. Your FICO score may be 000 but hey, you have a lot of cash, what would you need a FICO for anyway....think about it...

BB said...

Donald, you're an idiot or a RE "pro" -probably both.

The price "increases" are MONTH TO MONTH and strictly a seasonal result of the summer when people often move with families/kids, and generally buy larger higher priced homes. The real story is much less sunny. Wait until this fall/winter.

Take a look at YEAR ON YEAR price changes to see what's really happening in the world of housing.

DOPE!

Watch the fun said...

Folks, as much as I like HP, and I know I am going on a limb here, but this looks to me like a bottom. My reasoning behind this? I am probably one of the few on this blog that was in RE in the 1987 to 1991 period (not a Realtor and would never want to be), which was actually far uglier than this event. This one is more hyped because there are 2500 media outlets now instead of about 10 back then, but it was uglier. 700 banks failed back then. Some regionals have gone under so far and probably one more biggie. These downturn cycles seem to last about 4 to 5 years in total. Some areas are different of course, but on the whole it is about that long.

Looking at the Case Schiller numbers, the insanity began about mid 2004 in earnest. Most of the loans before then were pretty vanilla 20% and 10% down fixed rate, and a few variables that included normal margins. Most folks that were going to foreclose on those loans are already out of the system. The real trouble are the resets on the ALT-A and subprime junk in 2005 - 2008. Those will all proabably default (I have to agree with Kramer on that take) however based on the acceleration that I have seen, the defaults are happening early and are not going to be drawn out to the actual reset period. Why? Because the people staring down an adjustable sub prime or ALT-A are just walking well before the reset. Why would they prolong the inevitable. The media is helping it along by breaking down their pysch. Ask yourself, would you hold on? At the same time, the sales volume shows that the banks are FINALLY capitulating under the mounting pressure from a declining market, jingle mail, and angry stockholders. Homes are FINALLY being dumped by the banks rather than them just balking at offers. Now with the cloud of Fannie and Freddie over everyone, the worst is being assumed and that is just sealing the deal. I am not saying that home prices are going to go up any time soon, what I am saying is that we are witnessing the pinnacle here folks, and take advantage of the opprotunities if you have the means. It won't happen again for a long time. One other side note, in my experience, trust NOTHING a Realtor says. I know I am preaching to the choir here, but for those that have doubts, trust me. Keith is right when he calls them sales clerks. Them and the NAR pumped everything in the 90's as now, and many people lost a lot. My advice is Redfin, or if you like a home and want to make some cash, go with one of the rebate "realtors". You get 1% of their commission. Or better yet, negotiate yourself and tell the bank or seller you will represent yourself, and tell them to take 6% off the price.

Anonymous said...

Looks like you bitter renters are losing!! For a second consecutive month, the New York Case Shiller Index has shown a month-over-month PRICE INCREASE!!!! Let's recap for all the bitter renters joing the show already in progress:

April: -8.4%
May: -7.9%
June: -7.3%
July: ???


This is why people lose their homes, go bankrupt, go into debt, vote republican to give their money to rich people, etc---THEY HAVE NO GRASP OF MATH.

These figures are ROLLING year-over-year price comparisons.

Why is the June number less negative than the May number? It could be because the *DROP* during the month that was ADDED to the rolling 12-months was a smaller drop than the drop in the month that was REMOVED (last June.)

This would mean PRICES ARE STILL GOING DOWN!

GET IT?!?!?!? If not, go back to high school and learn about moving averages, rolling sums, etc.

(Actually, after writing this, I looked and it turns out the New York index DID go up in June--it went up ONE SIXTH OF ONE PERCENT. Well within the margin of error--basically, NOISE. During one of the seasonally-expected BEST months of the year. That's the second worst June in a DECADE in New York--last year being the worst June in a decade. And since last June is the month being dropped from the 12 month rolling aggregate...see above.)

It will be interesting to see what prices do this winter, the yearly slow period. Will they go down 1% PER MONTH in New York like they did last year? MORE than that? I'm willing to bet. Will they stay flat all winter like they do for most years on record? Maybe. Increases?!?!? Even with all the bankers losing their jobs? I DOUBT IT.

Oh, and by the way--NOT ALL OF US RENTERS ARE LOOKING TO LIVE IN NEW YORK. Check out Washington--we just rolled prices back another month this month--to August 2004.

Anonymous said...

Yeah, but didn't you read the part about a "silver lining"?

Return to normal is just around the corner. Happy days are here again. 15% appreciation will be back soon!

debbie doing sacramento said...

I just started hooking today.I needed some income because I got foreclosed on when I lost my job at starbucks.My double d's would sure bring in the customers.I had guys 10 deep in line all waiting for their chance to see them up close.It is the funniest thing in the world.I had one dumbshit propose to me, loser!

Anyway the johns I serviced today were quite nice.They all have the same story, wife is worthless in the sack.

I am looking for work but times are tough.I applied at taco bell but even they are struggleing.

I rented a 1 bedroom but I require the johns to pay for a motel room.

Hopefully I can find work soon.My ex husband was a realtor and now he is looking at internet porn all day.He told me he applied at walmart.

brokersleaveyoubroke said...

Just when you thought that subprime lending was a thing of the past the FHA steps up to the plate and says "bring em on" the taxpayer will cover the losses. It's hard to believe but it's happening.

http://tinyurl.com/5w8wdk

Anonymous said...

let's do simple math here.

median FAMILY income- $50,000

median home price- about $200,000

3 times income X $50,000=$150,000

for homes to be affordable tomorrow the median home price needs to fall by 30%.

even using 4X or 5X for the coasts homes would still be overvalued there too.

homes are still too expensive.

donald said...

Home prices are NOT seasonal. Only sales volume and inventory are. Saying that prices are only up month over month because it is the summer is a very weak argument supported by no facts.

Anonymous said...

Pro Athletes and golfers?

Not so fast said...

" brokersleaveyoubroke said...
Just when you thought that subprime lending was a thing of the past the FHA steps up to the plate and says "bring em on" the taxpayer will cover the losses. It's hard to believe but it's happening.

http://tinyurl.com/5w8wdk"

This could be bad, or it could be good for the market. It all depends on how it is implemented. If they are going to loan money based on reasonable terms and not exploding rate margins like most of the subprimes were, it may not end up being that bad. Most folks that purchase and intend to occupy their homes, will not just walk if the value goes down, as long as the payment does not jump way out of whack. Speculators or people that see their home depreciating and see an inevitable reset coming to something they cannot afford, and a servicing officer at the other end of the phone that does not care - they walk.

This whole debacle is not as black and white as some want to think. This whole thing has to do with

1. Crooked servicers that actually had more fee incentive to go to foreclosure than to work with borrowers. What do they care if the person loses their home and the investor loses half their principal - it is not and never was their money. They got their fees no matter what. In some cases their "internal legal departments" made out like bandits when it did default by charging large fees to both the investor and the homeowner.

2. Most subprime adjustables went from a "teaser" rate of 3.0% to between 9 and 10% at reset. Some neg am loans were even worse as the rate not only exploded but due to the larger balance - that 10% reset really was crushing. Compare this to the normal adjustable or MTA loan (with a normal 2.5% or 3% fixed margin) which actually has gone down due to tracking short term treasuries. Those that have one of these have seen their payments progressively go down for a year or so, and if they are smart, have paid the difference towards principal.

3. No down payments with cash out on refinance. It is one thing to only require a 3% down payment, which the FHA has done for years with no big issues. It is entirely something else to provide people with free money in front of their face and then say to them "just sign here". What do you think they will do?

The big problem that caused all of this was Mortgage crooks being paid by Wall Street large YSP (Yield Spread Premiums) to put people in products that were ticking time bombs. As long as FHA does not make the same mistakes, and just continue doing what they have been doing for years, it should not cause all the angst that some are fearful of. Just make everyone on the chain accountable for investor losses, and better yet, put no profit in swindling people.

However, alas, as long as Bush and his cronies are in charge, accountability seems to not be the order of the day.

Larry said...

Folks, as much as I like HP, and I know I am going on a limb here, but this looks to me like a bottom.

There were 2 lending 'humps'. We're currently in the 'eye' of the lending storm. ALT-A's are soon to follow. Not the same? Well this guy is willing to back up the fact that they look the same on paper with respect to late payments, 'being under-water', etc.

http://www.youtube.com/watch?v=pmeBSWI9sF8

Yoski said...

Looking at the Case-Shiller data some places have indeed bottomed (Denver, Charlotte, Dallas, etc.). Most of these places have a decent economy and never saw the crazy price increases Miami, LA or Phoenix saw. The index was 100 on 1/2000. Now 8.5 years later, assuming a 3.5% rate of inflation the index should be at 134. That's precisely the range many of the places that have bottomed are. Others are much higher and still have a long rocky road ahead of them.

Anonymous said...

Lets see,

Around 30% of homebuilders buyers are about to be wiped out do to the OCT.1 bailout bill and there is supposed to be a big push because of this bill...NOT!!!!!!

The bill is about to make seller downpayment assistance programs illegal which will have a huge effect on HOMEBUILDERS.

Welcome to DEFLATION people, 2009 is going to be scary!!!

I truly wish the bottom callers are correct, but unfortunately the next 18 months are going to be painful especially in housing.

ICEMAN


ICEMAN

Anonymous said...

Hey Keith,

I think you need to start a Commercial and Industrial Panic Blog.
I believe the National Anthem has just begun in this ballgame.

There are many disturbing reports that are developing in California and throughout the nation regarding these industries.

ICEMAN

Out at the peak said...

Watch the fun:

There are a ton of people who still need to walk or be foreclosed on from the Alt-A crisis that is just beginning.

There will be hundreds of banks that will go under. The country will be under a lot more strain than it is now.

I don't like the look of it and I hope something or someone can save us.

Banks are being a lot more flexible, but the shadow inventory (foreclosed, but not listed for sale) grows.

Anonymous said...

Where is the statement from the NAR that house prices are bottomimg out?

jasman said...

reagarding "the Bottom"

do a little homework.

the Alt A's have 3 years of crap to cycle thru.

try to think about thinking about maybe seeing a bottom in 2011. if then.

there is no bottom until everyone stops looking for it because no one will care anymore.

thats history.

Miss Goldbug said...

Out at the peak said: "Banks are being a lot more flexible, but the shadow inventory (foreclosed, but not listed for sale) grows."



I don't know about banks being more flexible, but I did notice a house in my area that has been for sale for over a year, with two previous offers which fell through, finally now has a sold sign.

In the neighborhood where I grew up in San Leandro, CA there are at least 5 empty homes within a one block area that do not have for sale signs, (Per Yahoo forclosures & my personal observance) another 3 additional homes are in forclosure, (without for sale signs) and 2 more homes with for sale signs are clearly in distress. Thats at least 10 homes in one neighborhood, that are in serious trouble.

Banks have so much forclosure inventory, they can't put all of it up for sale because it will scare the general public even more. Banks have extended their forclosure evacuations out until the end of this year.

At that time, there will be a flood of empty homes noticable to everyone with eyes and a peanut sized brain.

Lee said...

California down -40.3% yoy.

Didn't Yun and the NAR crowd say that 40% losses was unrealistic doom and gloom a year ago? And In December 2006?

Drops that steep, that fast, in that short a timeframe all but guarantee an overshoot on the correcting side and that prices will drop, adjusted for inflation, to or below 1997 levels.

This will put half of all homes in California underwater, and to a person these homedebtors will walk over the next 3 years. This will, in turn, put massive pressure upon the banking, financial, real estate, brokerage, home loan industries; FHA, FHLB, FNM, FRE, SAL and all the others who lent any money to anyone in California.

California is not the USA. But everyone else in the US and world needs to know that California has 1/8th the GDP of the USA, more than all but 8 nations, and that Los Angeles/Socal has 66% of CA GDP, more than all but 12 nations.

About $1,100 Billion USD GDP for L.A. and Socal from Santa Barbara to Tijuana to the Inland Empire.

So L.A. going Tango Uniform is like India, Brasil, South Korea, Russia, Australia, Canada or Mexico going under.

Such a default would have massive repercussions world wide.

Lee said...

"donald said...

Looks like you bitter renters are losing!!"

You must be delusional, a Realtor, or someone trying to pump the market to save his own balance sheet.

Here in L.A., prices are in freefall, have been for 2 years, and will for another 3 years.

Buying now is stupid, financial folly. You will just lose your downpayment, then be underwater for 10 years. If you never plan to move or retire in 10 years, and don't care about maximising the return on the downpayment, sure.

Go ahead. Buy now.

But prices will be lower in 24 months. Spend that time saving a downpayment, getting credit in order, and spending much less on the equivalent rental.

Anonymous said...

1) FOREIGN POLICY
2) SUPREME COURT: McCain sees
3) TAXES: McCain wants to give the
4) SOCIAL POLICY: Bush and Cheney
5) PRIVACY AND CIVIL LIBERTIES


NO NO NO NO NO!!!

Your list is ALL WRONG!

The very most important issues for the country are:

1) Flag pins.
2) Funny middle names that scare us.
3) Not letting anyone run for office who uses the word "articulate", or is articulate.
4) Keeping gays out of government jobs, families, and everything else (except Republican Congress and Catholic Priesthood.)
5) Keeping science and health education out of schools (and featuring religious education in schools.)
6) Tax benefits and lifestyle protection for the rich.
7) Killing most other people in case they might someday think about maybe planning to possibly try to kill us.
8) Opening up our national parks and other wild areas to every corporate exploitation we can think of--and providing tax payer money to incentivise the exploitation.


WOW you are out of touch!!!!

k.w. - Southern Ca. said...

It sure is different this time ... it's a hell of alot worse in all areas.

I had friends who spewed this talk out endlessly ... not anymore.

The backyard parties where everyone is a realestate millionaire has now come to an end.


blumpski said...
But it's different here. My house is special. Real estate is local and every market is different. Don't pay attention to the media - now is the time to buy. Houses always go up in value. You know, they're not making any more land.

Anonymous said...

Home prices are NOT seasonal. Only sales volume and inventory are. Saying that prices are only up month over month because it is the summer is a very weak argument supported by no facts.

LOL!!! You haven't even LOOKED at the Case Schiller index data by month and city, have you?

Or the MRIS data?

http://recharts.com/mris/mris_5.html

LOL

k.w. - Southern Ca. said...

Keep "watching for fun" - even though it's hardly funny to watch.

As long as prices continue to drop, it'a horrible time to buy - you're just "catching a falling knife" as the expression goes.

We're no way near the bottom.


Watch the fun said...
Folks, as much as I like HP, and I know I am going on a limb here, but this looks to me like a bottom. My reasoning behind this? I am probably one of the few on this blog that was in RE in the 1987 to 1991 period (not a Realtor and would never want to be), which was actually far uglier than this event. This one is more hyped because there are 2500 media outlets now instead of about 10 back then, but it was uglier. 700 banks failed back then. Some regionals have gone under so far and probably one more biggie. These downturn cycles seem to last about 4 to 5 years in total. Some areas are different of course, but on the whole it is about that long.

Looking at the Case Schiller numbers, the insanity began about mid 2004 in earnest. Most of the loans before then were pretty vanilla 20% and 10% down fixed rate, and a few variables that included normal margins. Most folks that were going to foreclose on those loans are already out of the system. The real trouble are the resets on the ALT-A and subprime junk in 2005 - 2008. Those will all proabably default (I have to agree with Kramer on that take) however based on the acceleration that I have seen, the defaults are happening early and are not going to be drawn out to the actual reset period. Why? Because the people staring down an adjustable sub prime or ALT-A are just walking well before the reset. Why would they prolong the inevitable. The media is helping it along by breaking down their pysch. Ask yourself, would you hold on? At the same time, the sales volume shows that the banks are FINALLY capitulating under the mounting pressure from a declining market, jingle mail, and angry stockholders. Homes are FINALLY being dumped by the banks rather than them just balking at offers. Now with the cloud of Fannie and Freddie over everyone, the worst is being assumed and that is just sealing the deal. I am not saying that home prices are going to go up any time soon, what I am saying is that we are witnessing the pinnacle here folks, and take advantage of the opprotunities if you have the means. It won't happen again for a long time. One other side note, in my experience, trust NOTHING a Realtor says. I know I am preaching to the choir here, but for those that have doubts, trust me. Keith is right when he calls them sales clerks. Them and the NAR pumped everything in the 90's as now, and many people lost a lot. My advice is Redfin, or if you like a home and want to make some cash, go with one of the rebate "realtors". You get 1% of their commission. Or better yet, negotiate yourself and tell the bank or seller you will represent yourself, and tell them to take 6% off the price.

k.w. - Southern Ca. said...

Out at the peak:

You are correct - the Alt-A (and other liar loans) are a much bigger problem coming down the pipe now.

Many involved are higher income earners who gambled just as foolishly, except they did it with the $2.5mil+ house instead of the $750k house.

Prices will drop like never before - and all the "experts" will still claim "we've hit bottom" - a feable attempt to calm the masses of people currently underwater in their houses, or soon to be.

No "doom-and-gloom" talk, just the facts - something this country doesn't believe in telling the people, until it's far too late for most.

Where are Obama or McCain on this issue? Who do you think is really worthy voting for?


Out at the peak said...
Watch the fun:

There are a ton of people who still need to walk or be foreclosed on from the Alt-A crisis that is just beginning.

There will be hundreds of banks that will go under. The country will be under a lot more strain than it is now.

I don't like the look of it and I hope something or someone can save us.

Banks are being a lot more flexible, but the shadow inventory (foreclosed, but not listed for sale) grows.

Anonymous said...

Home prices are NOT seasonal.

LOL

Here's the average month-to-month case-shiller index increase in PRICE between Jan 1990 and today, by month of year:

(Averaging across only Phoenix, Miami, Washington, New York--if you want the other 16 cities, YOU do the Excel work!)

January .14%
February .16%
March .30%
April .49%
May .64%
June .72%
July .60%
August .52%
September .35%
October .25%
November .11%
December .08%

LOL Gee, THAT doesn't look seasonal AT ALL!

Anonymous said...

SORRYmade a mistake on that last post, due to July-Dec being missing in the current year--

Here are the corrected numbers for July-Dec:

July .69%
Aug .59%
Sep .42%
Oct .32%
Nov .18%
Dec .18%

Still, definitely looks NON-seasonal to me! LOL!

Anonymous said...

"The index was 100 on 1/2000. Now 8.5 years later, assuming a 3.5% rate of inflation the index should be at 134."

I thought Case Shiller was inflation adjusted. So it should go back to 100.