Case-Shiller Says Double Dip Is Here, D.C. Only Market Showing Improvement: Dallas Down 2.5% From First Time Home Credit Daze
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If you bought your home in 2002, on average spread across the U.S., your home has not gained a wink of value from that price nine years ago. That’s the latest from those good folks who bring us the Standard & Poor’s/Case-Shiller index and have now confirmed the Double Dip is documented.
Hmmm.
High drama: it is the worst downturn since prices began spiraling. But remember what we are comparing it to: last year’s first-time homebuyer’s credit.
I know what the numbers say, but I challenge Realtors who read this blog to comment with real-life examples of sales that defy this claim. Have you sold any homes lately for more than they were in 2002? What about?
The index fell 4.2% in the first three months of 2011 after declining 3.6% in the fourth quarter of 2010. The first-quarter 2011 index decreased 5.1% from a year earlier.
And in March, the index fell from a year ago in 19 of the 20 metropolitan areas tracked by the S&P/Case-Shiller with a dozen MSAs reaching new lows. The only city to see a gain is Washington, D.C., where home prices in the puffed up nation’s capital rose 1.1% from February, up 4.3% from a year ago. That is because money and jobs are being created in D.C. Seattle home prices crept up 0.1% in March from the month prior, but are still 7.5% lower than a year earlier. And of course, economists are now calling it the Double Dip.
Dallas-Fort Worth was not spared: our average price was down 2.5% from a year ago.
Dallas average home price in March, 2011: $112.89.
That is 0.8% lower than prices in February.
That is 0.2% lower than prices in January.
And -2.5% lower than the average price of a Dallas home in March, 2010.
Here’s how the other cities in the 20 city composite fared — Minneapolis really took a hit.
I watched ABC News and Nightline tonight. The usual: reporter finds a couple looking for a house, asks them if they have given up on the great American Dream. Wouldn’t you rather rent? I am so sick of these of stories. What the bejesus do people think is going to happen when everyone is renting? Landlords will raise rents – in fact, rents are up by 6% in Dallas/Fort Worth. No, home ownership is not for everyone. You need to keep your feet planted on that dirt for several years, not flip the family homestead. If you anticipate a move in a year, two or three, by all means lease and you should always lease when you ever are uncertain about where you are buying. Want to live in a high rise? Lease one for a year. But as rents go up, leasing is just going to get more costly. Then, when it’s cheaper to own rather than lease, will people get back into home ownership with, hopefully, more stable financing? They will have to pony up 20 to 30% down payments. Without that, they will be stuck. Immobile. Nightline queried Neil Barofsky, an NYU law professor who testified in favor of the bank bail-out but now says our government has betrayed us: taxpayers bailed out the banks but the banks have not been supporting housing, as they said they would. Once again I ask: when are federal banking regulators going to loosen up home lending?
Interestingly, Bob Shiller may be immortalized as the man who changed the American Dream from home ownership to home rental with his constant psychological ownership bashing. He told ABC that he thinks home prices may even be lower in ten years than they are now.
Could that happen in Dallas/Fort Worth?
12 Comments
What I've seen this year is a slow market (better than last year's though) with buyers willing to "buy" at highly reduced prices. That trend is lowering house values in the metroplex making it hard to recover. I believe that the main reason to buy at bargain prices is to protect yourself from future decline in prices.
What I've seen this year is a slow market (better than last year's though) with buyers willing to "buy" at highly reduced prices. That trend is lowering house values in the metroplex making it hard to recover. I believe that the main reason to buy at bargain prices is to protect yourself from future decline in prices.
Daniel, wait — do you mean buy now to protect from a future decline? But doesn't that mean paying less — or do you mean getting less for the home you have?
Daniel, wait — do you mean buy now to protect from a future decline? But doesn't that mean paying less — or do you mean getting less for the home you have?
I won't cover all of the questions, but here's a few thoughts… Comparing sales to 1st & 2nd quarter last year is a false comparison. Let's compare those numbers to Q1 and Q2 2009 for a real comparison. The tax credit basically stole sales from the rest of the year, front-loading all of the activity to Q1 and Q2. We will again have negative 2011 Q2 results compared to Q2 2010. It won't be until Q3 that the numbers will start to reflect apples-to-apples comparison.
I completely agree, renters have little tolerance for constant rent increases. If large numbers of potential buyers continue to rent for the next 12-36 months, we will be rent prices continue to climb higher and higher. There will be large numbers who decide, risk be damned, to buy, because it will actually be cheap or the same price.
Much of Dallas/Fort Worth condo woes can be traced back to rent vs. buy debate. In the past years, renters have been able to lease a condo for less than it costs to own it, in the higher-end market. As apartment and condo rental prices increase, the balance will tip back toward buying.
I think it's really over-the-top to say that prices will be lower in 10 years! What's the reasoning?? Are millions of Americans about to leave the country, creating a large # of unneeded properties? With projected population growth, this country will need MORE properties, albeit low-cost properties(because this growth isn't happening in the $100k a year households).
Geez, chicken little, Mr. Shiller may need to up the MG's on his nerve pill.
I won't cover all of the questions, but here's a few thoughts… Comparing sales to 1st & 2nd quarter last year is a false comparison. Let's compare those numbers to Q1 and Q2 2009 for a real comparison. The tax credit basically stole sales from the rest of the year, front-loading all of the activity to Q1 and Q2. We will again have negative 2011 Q2 results compared to Q2 2010. It won't be until Q3 that the numbers will start to reflect apples-to-apples comparison.
I completely agree, renters have little tolerance for constant rent increases. If large numbers of potential buyers continue to rent for the next 12-36 months, we will be rent prices continue to climb higher and higher. There will be large numbers who decide, risk be damned, to buy, because it will actually be cheap or the same price.
Much of Dallas/Fort Worth condo woes can be traced back to rent vs. buy debate. In the past years, renters have been able to lease a condo for less than it costs to own it, in the higher-end market. As apartment and condo rental prices increase, the balance will tip back toward buying.
I think it's really over-the-top to say that prices will be lower in 10 years! What's the reasoning?? Are millions of Americans about to leave the country, creating a large # of unneeded properties? With projected population growth, this country will need MORE properties, albeit low-cost properties(because this growth isn't happening in the $100k a year households).
Geez, chicken little, Mr. Shiller may need to up the MG's on his nerve pill.
I really want to interview Bob Shiller. Maybe he'll be at Inman San Fran in July. I think he means well but I fear he thinks on an intellectual level and like so many intellectuals, assumes a certain level of participation by everyone which never pans out.
I really want to interview Bob Shiller. Maybe he'll be at Inman San Fran in July. I think he means well but I fear he thinks on an intellectual level and like so many intellectuals, assumes a certain level of participation by everyone which never pans out.
Rentals are a very hot commodity and I recently have a $3000 rental home rent for $3400 on a 20 months lease– 8 applications in 4 days and a ton of showings– it was a true bidding war. It rented for about $600 more per month than it would have 5 months earlier. A lot of buyers ask their friends and family what they should do and go with it.! Not to mention the fact that interest rates are the lowest in years and so are house prices. I have a friend Who lives in Miami Florida who put an offer in on a house last week because in the last 3 years she spent a $100,00o on rent and the house she is buying is $220,000. She is sick about that rental money spent. The math on the house I rented last month for $340,000 is crazy but good for my seller née landlord. She would have taken $450,000 for her house– the renters will be paying off her mortgage a lot faster than she could have.
Rentals are a very hot commodity and I recently have a $3000 rental home rent for $3400 on a 20 months lease– 8 applications in 4 days and a ton of showings– it was a true bidding war. It rented for about $600 more per month than it would have 5 months earlier. A lot of buyers ask their friends and family what they should do and go with it.! Not to mention the fact that interest rates are the lowest in years and so are house prices. I have a friend Who lives in Miami Florida who put an offer in on a house last week because in the last 3 years she spent a $100,00o on rent and the house she is buying is $220,000. She is sick about that rental money spent. The math on the house I rented last month for $340,000 is crazy but good for my seller née landlord. She would have taken $450,000 for her house– the renters will be paying off her mortgage a lot faster than she could have.
Thanks, Kathy. That's my point. The media says "go rent" but then those will creep up as they have and housing costs will rise, great for landlords, not so good for consumers. The answer, I think, is to get some sort of solid financing maybe at 10% down payments for qualified buyers.
Thanks, Kathy. That's my point. The media says "go rent" but then those will creep up as they have and housing costs will rise, great for landlords, not so good for consumers. The answer, I think, is to get some sort of solid financing maybe at 10% down payments for qualified buyers.