U.S. home prices have fallen more than in Great Depression

[Ichingcarpenter]

U.S. home prices as measured by the Case-Shiller index have now fallen by more than they did during the Great Depression, according to Capital Economics.

Paul Dales, senior U.S. Economist at Capital, said the Case-Shiller index released earlier on Tuesday — which tracks prices of single-family home in 20 major U.S. cities — are now 33% below the 2006 peak and back at a level last seen in the third quarter of 2002, edging out the 31% dip seen in the Depression of the 1930s.

“On that occasion, the peak in prices was not regained until 19 years after they first fell,” Mr. Dales said.

“The similarities between the current downturn and that seen during the Great Depression are striking,” Mr. Dales said in a note. He pointed out that on both occasions, prices initially fell by 31% and, after a temporary rebound, dropped back by 7%, the dreaded double-dip.


http://business.financialpost.com/2011/05/31/u-s-home-prices-have-fallen-more-than-in-great-depression/

[xchrom]

1. recommend

[Warpy]

2. Real estate prices plummeted all during the 1920s

causing the middle class to try to recoup their net worth in the roaring stock market. By the time the crash happened and the Depression began, housing prices were already at rock bottom.

[Ichingcarpenter]

10. Very inaccurate info you have

In 1930 average new house cost $7,145.00 and by 1939 was $3,800.00
http://www.thepeoplehistory.com/1930s.html
http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket/livetables/

The prices peaked in 1925 and then went down hill for the next 19 years.

[Dawgs]

3. According to many DUers, that's still NOT low enough.

:eyes:

[Vinee]

4. and yet my property taxes still managed to increase. grrrrrrrrr

:mad: :mad: :mad: :mad:

[DJ13]

6. +1

[closeupready]

5. And they will continue to fall.

nt

[Shagbark Hickory]

7. They have plateaued in many areas. Why do you say this?

[closeupready]

8. Employment continues to be weak, making workers feel vulnerable.

Not a good frame of mind in which to purchase homes. Also, credit has been damaged by the recession.

[Ichingcarpenter]

12. The shift from full-time jobs to temporary positions.

The shift from full-time jobs to temporary positions. Doesn't help home buyers or the market.

In 2010, 26 percent of all news jobs were temporary – compared with less than 11 percent in the early 1990′s recovery and just 7.1 percent in the early 2000′s.

[closeupready]

13. Had we gotten single payer, I'm convinced this trend would not be as strong as that.

However, in light of the fact that there are no cost controls built in to Obama's health care 'reform', employers likely believe that health care premiums and costs are going to continue escalating higher than inflation for years on end. Thus, why hire long-term liabilities when you can hire temps to do the same thing? :(

[bemildred]

9. The bigger the bubble, the bigger the "POP". nt

[Hannah Bell]

11. which = 1/3 drop in the primary wealth of most americans.

[Ichingcarpenter]

14. Another Bankster Bailout? Sure sounds like it

Falling Home Prices Hit Big Banks, Fannie, Freddie

So what about the banks? Sure, they took huge write-downs already, but there is clearly more pain to come, especially given that this report out today is actually a three month running average based on home sale closings in March, so really you could say the whole thing is based on sales contracts signed around six months ago. We've seen considerably more housing weakness since then.

"All will have to take new markdowns if these price pressures continue, which everything points to the fact that it will," says Peter Boockvar at Miller Tabak. "Bank balance sheets are still cluttered with mortgage loans, and they are still being asked to take back bad mortgages from those that bought them, like Fannie Mae and Freddie Mac, so the lower home prices go, the risk rises that another round of balance sheet write downs may be necessary."

And speaking of Fannie and Freddie (and I'll throw in private label and FHA), when you consider the enormous volume of bank-owned (REO) inventory of foreclosed properties they're holding....

http://www.cnbc.com/id/43224167

"If we do not see a meaningful recovery in home prices by the end of the year, we may need to contemplate impairment charges on first liens owned by banks and wholesale write-downs of second lien exposures. This implies solvency issues for BAC , WFC , JPM and C , and big losses for the U.S. government and private investors," says Chris Whalen of Institutional Risk Analytics.

Solvency issues eh? You mean mark-to-market suspension was just another way to lie?

Yep.

Exactly as I've noted - this sort of lying is not only pernicious it's ridiculously dangerous, as eventually the truth always shows up. When you get to the point that you can't pay the light bill any more the lies are not only exposed but the damage you allowed to accrue by pretending and dissipating further value during that time makes the eventual losses worse.

Everyone remembers that Committee Meeting in 2009 with Kanjorski, right? I sure do. It marked the bottom in the stock market nearly to the day.

And if, as I have repeatedly said I believe since, it proves to have been nothing but a pack of BS and game-playing for the benefit of those banksters, then the former value at 666 was in fact too high as the dissipation since will have to be accounted for as well.

Buckle up folks.