Housing Prices Slip across the Nation

Tuesday, February 22nd, 2011

According to the LA Times, there has been a 2.4 percent decrease on the S&P Case Schiller Index, the leading indicator for tracking changes in the value of US real estate. This marks the fifth straight month of declines in the housing market, prompting questions about whether the housing market may be entering a double-dip recession.

The trend illustrated in the Case Schiller Index showed the downturns were not constrained to any one section of the country, but rather nearly all metropolitan areas have reported declines. Specifically, the index showed downturns in Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York, Portland, Phoenix, Seattle, and Tampa.

Reports indicate that California endured the downturns better than most, but the Case-Schiller Index doesn’t specifically measure the areas in California that were initially hit hardest when the housing market bubble in 2007, such as the Inland Empire or California’s Central Valley. Foreclosures remain commonplace in these areas.

Experts such as Robert Shiller, an economics Professor from Yale University, indicated that the prices could drop further. The professor mentioned that he foresees housing prices dropping by another 15 percent to 25 percent. He stated that this was not meant to be taken as a forecast, but rather as an indication of the considerable risk the housing market faces.

Dean Baker of the Center for Economic and Policy Research in Washington indicated that the recovery we saw last year was primarily fueled by federal home buying credits that have since last summer dried up. Essentially, without the stimulus money flowing into the economy, prices have again begun to fall. Apart from this, the stubborn 9 percent employment rate has also plagued the real estate market as well. Baker stated that without the tax credit, there is nothing to prevent further deflation.

Not all analysts agree with this. For example Schiller’s partner and fellow economics professor, Karl E. Case, saw potential for a turnaround in the near future. While Case cited the mood might possibly change in the housing market, he fails to address what specifically might shift the mood in the housing market and how soon this may occur.






Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com

Tags: case-schiller , double-dip , downturn , housing , recession

Related Articles
Geitner pushes for housing overhaul bill
Obama's 'White Paper' and Reforming Housing Finance
Obama Housing Finance Plan Due Out by End of Week
European Sovereign Risk Growing Concern for U.S. Businesses and Banks
General Electric (NYSE:GE) CEO Says Economic Recovery Will Come from Business, Not Consumers
Has Britain Really Emerged From the Recession?
Majority of U.S. Businesses Not Going to Hire in Next Six Months
U.S. Companies Cut Payrolls as Recession Lingers
Is FHA too big to fail?
Unemployment in U.S. Surges and Equipment Sales Fall as Recession Continues On
Business Investment Being Counted on for Growth in U.S.
Give Your Opinion
What is the minimum deposit for a home loan deposit in Ireland?
Share a simple answer to help inform others:
Specific to any country?
First name / Alias

• Your answer will be posted here:
What is the minimum deposit for a home loan deposit in Ireland?
Financial Questions & Answers
Ask A Question
Get opinions on what you want to know:
Specific to any country?