The Standard & Poor’s/Case-Shiller National Home Price index released data for the first quarter of 2009 this week showing that overall home prices in the U.S. fell by an average of 19.1%, the largest drop in a single quarter in the 21-year history of the index itself.
Bloomberg, The Times and all the other major newspapers are apparently shocked thta there was a drop in US housing starts in April. According to Bloomberg yesterday:
U.S. stocks declined as banks fell after Moody’s Investors Service said commercial property values plunged and Home Depot Inc. retreated following an unexpected slump in housing starts.
And the Times ran with a similar lead in, which is entertaining because in March they reported “an unexpected rise in new home sales,” which apparently heralded “the first tentative signs of economic “green shoots.”
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Lately, even the mainstream media in the United States are overdosing on apocalyptic reporting.
Once you’ve covered a global financial meltdown, a global swine flu pandemic, the bursting of the largest residential real estate bubble in memory, the prospect of bankruptcy at two of the Big Three auto manufacturers, U.S. policies on torture (and its salient drawbacks and rewards), and the spectre of thermonuclear war waged by any of a handful of rogue nations currently run (or about to be run) by insane persons, you do start to get a little jaded.
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Moody’s lates REAL commercial property price index is a stark reminder of the current financial situation. Showing a 5.5% drop in prices in January, this is the largest one-month drop in the history of the index.
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As the real estate market corrects itself, one thing is becoming abundantly clear. Throwing taxpayer’s money at the problem is not helping, nor is it going to. We are way beyond that. Real estate values are correcting all over the world and giving vast handouts to the banks to prevent them from being free market economy traders is not going to stop them. In a genuine free market, these banks would have gone out of business long since.
More on Real Estate Market News – Nothing is going to stop the correction going on
According to a January 11th article by New York Times reporter Bob Tedeschi, if you are looking at buying real estate in a traditionally high-priced area of the United States, it might make sense to wait a few weeks before making your move. Some members of Congress are reportedly urging Barack Obama to include a clause in the pending $800 billion economic stimulus package which would raise the dollar limit on “conforming loans.”
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