I can't wait for the weekend to begin
I'm workin' all week long
I dream the days away
I wanna' sing my song
So let the music play
Michael Gray – The Weekend
Good news for your real estate consumption: prices are more affordable in 85% of US housing markets than they were just one year ago. A whopping 40% of all housing markets hit new lows since the bubble peak. Soon houses will be affordable everywhere.
by CalculatedRisk on 1/25/2011 09:00:00 AM
S&P/Case-Shiller released the monthly Home Price Indices for November (actually a 3 month average of September, October and November).
This includes prices for 20 individual cities and and two composite indices (for 10 cities and 20 cities).
Note: Case-Shiller reports NSA, I use the SA data.
From S&P: U.S. Home Prices Keep Weakening as Eight Cities Reach New Lows
Data through November 2010, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show a deceleration in the annual growth rates in 17 of the 20 MSAs and the 10- and 20-City Composites compared to what was reported for October 2010. The 10-City Composite was down 0.4% and the 20-City Composite fell 1.6% from their November 2009 levels. Home prices fell in 19 of 20 MSAs and both Composites in November from their October levels. In November, only four MSAs – Los Angeles, San Diego, San Francisco and Washington DC – showed year-over-year gains. The Composite indices remain above their spring 2009 lows; however, eight markets – Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009.
The first graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).
The Composite 10 index is off 31.0% from the peak, and down 0.4% in November(SA).
The Composite 20 index is off 30.9% from the peak, and down 0.5% in November (SA).
The Composite 10 SA is down 0.4% compared to November 2009. This is the first year-over-year decline since 2009.
The Composite 20 SA is down 1.6% compared to November 2009.
The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.
Prices in Las Vegas are off 57.8% from the peak, and prices in Dallas only off 8.9% from the peak.
Prices are now falling – and falling just about everywhere. As S&P noted “eight markets – Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices peaked in 2006 and 2007”. Both composite indices are still slightly above the post-bubble low.
Have you noticed that mainstream media headlines always portray house price drops as bad and price increases as good? The facts are that house prices hit new lows in 40% of the markets surveyed (8 of 20).
The false bottom engineered by the federal reserve has been taken out in 40% of the nations real estate markets.
How will the other 60% fair?
Irvine Home Address … 76 KAZAN St #36 Irvine, CA 92604
Resale Home Price … $239,900
Home Purchase Price … $105,000
Home Purchase Date …. 7/24/98
Net Gain (Loss) ………. $120,506
Percent Change ………. 114.8%
Annual Appreciation … 6.5%
Cost of Ownership
$239,900 ………. Asking Price
$8,397 ………. 3.5% Down FHA Financing
4.84% …………… Mortgage Interest Rate
$231,504 ………. 30-Year Mortgage
$48,773 ………. Income Requirement
$1,220 ………. Monthly Mortgage Payment
$208 ………. Property Tax
$0 ………. Special Taxes and Levies (Mello Roos)
$40 ………. Homeowners Insurance
$185 ………. Homeowners Association Fees
$1,653 ………. Monthly Cash Outlays
-$114 ………. Tax Savings (% of Interest and Property Tax)
-$286 ………. Equity Hidden in Payment
$16 ………. Lost Income to Down Payment (net of taxes)
$30 ………. Maintenance and Replacement Reserves
$1,298 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$2,399 ………. Furnishing and Move In @1%
$2,399 ………. Closing Costs @1%
$2,315 ………… Interest Points @1% of Loan
$8,397 ………. Down Payment
$15,510 ………. Total Cash Costs
$19,800 ………… Emergency Cash Reserves
$35,310 ………. Total Savings Needed
Sq. Ft.:: 0900
Property Type:: Residential, Condominium
Style:: Two Level, Other
Year Built:: 1972
Community:: El Camino Real
HUGE PRICE REDUCTION!! Great location close to 5 Fwy, Award winning Irvine Schools, and shopping. Quiet and private upstairs location, and close to HOA Amentities. Perfect for investors or the first time buyer.
This video was linked in the astute observations this week. It is a great weekend watch.
IHB Weekend Edition
Why don't I write seven posts a week? Time away from my family is one obvious answer, but its more complicated than that. When I first started writing for the IHB, I didn't have access to the traffic counts, and I didn't watch to see if more or fewer people are reading. Traffic didn't matter. I wanted to write because I had something to say about house prices.
When I started watching traffic I noticed that the weekend had 30% less traffic no matter the content. As I grew to know the readership, I realized many people were reading the IHB in their offices, so they only checked Monday through Friday.
After a time of posting on weekends just like a weekday and trying new things, I resigned myself to the fact that fewer people were going to read on the weekend. I stopped doing normal property profiles and began leaving open threads similar to our old forums.
It's time for something new. I played with Photoshop and modified the American Gothic TV studio graphic to create a Weekend Edition.
I will create a weekday post to last two days. I may post about properties in Las Vegas or stories of our work out there. I do have some funny and interesting stories.