Tuesday, May 27, 2008

Home Prices Plunge

Standard & Poor's/Case-Shiller study shows record decline for housing prices in first three months of 2008.
U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday. It's a somber indication that the housing slump continues to deepen.

Standard & Poor's/Case-Shiller said its national home price index fell 14.1% in the first quarter compared with a year earlier, to its lowest level since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.

The narrower indices also set record declines. The 20-city index tumbled 14.4% during the quarter, the lowest since that index was started in 2001. The 10-city index plunged 15.3%, a record in its 20-year history.

"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.

Nineteen of the 20 metro areas surveyed reported annual declines, with 15 of them posting record lows. Six metro areas lost more than 20%.

Las Vegas had the worst quarterly performance, falling 25.9%, followed by Miami and Phoenix. Only Charlotte, N.C., stayed above water, gaining less than 1% over the previous year.
With this report you can be sure that the rate of foreclosures will only grow. Even those paying their mortgages may decide its not worth it to struggle to pay for a home now worth less than the purchase price.

Many people have seen their equity taken away with these falling prices. Real estate was always supposed to be a safe investment, it has now turned into a national nightmare. Those who created this mess are laughing all the way to the bank as the the rich get richer and the poor get poorer.