"What impresses me no matter how you look at it... the story comes up again and again: there is some serious improvement. We've taken the first step toward beginning to turn this around," said David Blitzer, who runs the Case-Schiller Index. He fairly gushed today over the April results of his survey, which tracks resale price of homes around the country.
The index showed a .6% drop in home prices, which these days qualifies as great news.
In Minneapolis, the drop in resale prices mirrored the nationwide average (-.66%), the ninth consecutive month of declining prices, but the lowest drop during that period in which home resale prices dropped here about 16 percent. They've dropped 22 percent in the last year. Good times, indeed.
"In 13 of the 20 cities the decline is less than last month," Blitzer said this morning. "Some people out there are feeling a touch better and are willing to go out and look at a house and in some cases are willing to buy a house."
House resale prices in April 2009 are roughly the same here as they were in August 2000.
Meanwhile, another report today shows consumer confidence has dropped.
There are several mortgage crises in the pipeline yet. Commercial property, and standard mortgages are defaulting now raising foreclosure rates, and no one ever did actually do anything to help anyone keep their homes- focusing instead on trying to save bank investors. The remaining bubble bursts are slow burners for now but if the economy doesn't pick up that may change. Hopefully we're bouncing around the bottom, but we'll be here for a while at the very least.
Affordable housing isn't bad for the economy by the way, housing was obviously way over priced. We could have taken over the banks for a while and kept people in their homes but that train left the station when those in charge decided to save the banks instead of the mortgages. Now we'll just have to wait for all the foreclosures to unwind. The most fortunate are those who are can afford their mortgages even though the house is worth less than that mortgage, they'll have to stay in those houses until the prices recoup, but at least they'll have houses to stay in. Again, we could have done something to help those folks but the money's gone now, to bad so sad.
There was an interesting -- an infuriating -- segment on Marketplace last night from an economics reporter who's been checking on the various scandals and such. He reported that in most every case, he was told that *he* was the first call some companies (and others) got. Nothing from Treasury. Nothing from SEC.
It's not confidence inspiring, that's for sure.
Wait until the $8000 tax credit goes away, then we'll see. Otherwise, it's all just inflated with that right now.
Agreed, Justin. My fiancee and I have been house-shopping for the last 2 months and seen 28 houses. The market is surprisingly hot right now in the $200-255k range, due to the tax credit.
200-255k? Yikes. How do people afford payments on that much house?
We're probably in the 50-60 houses that we've seen yet, but still haven't found the right combination criteria yet. What Tyler says is true though--that range is moving pretty well, especially if a house is in good shape. There's so much junk on the market, that the nice houses sell FAST.
Take a look on the market, Bob - for anything close to a decent-sized house (1750 sq feet, 2-3bedroom, 2.25 bath), it really does start at $225,000, from South Minneapolis out to through the outer suburbs. Only into New Hope and St. Micheal do the prices start to come down.
The lower end of the housing market is at a premium right now...I have a hard time believing the "medium sale price" in the cities in $175k like I've heard on NPR. There's an awful lot of numbers flying around in the media, and I don't many of them accurately reflect what's going on.
I wonder if the $8,000 tax credit acts like financial aid from the Legislature to college kids. Does it just make the asking price go up $8,000?
Bob, Tyler is right. $225K is where it starts for a house like he described.
We afford our house by having two incomes, no kids, only one car (that's paid for), no credit card debt, no medical bills, and modest student loan debt. That we are in this position speaks a bit to being given some financial education, but also just to a lot of luck.
If only one or two things on that list were different, I can see how it could be VERY hard for a lot pf people to buy or keep their homes.