Wednesday, February 25, 2009

Tumbling Down

Yesterday, it was reported that U.S. home prices tumble at record pace with home prices off 18.5 percent in December from the prior year according to two housing indexes.

As we talked about in yesterday's post, the Federal Government’s new “Homeowner Affordability and Stability Plan” may find more people ineligible as prices fall, because homeowners may not qualify. The estimated 5 million borrowers in good standing who are current on their payments but owe from 80 percent to 105 percent of their home's value would be able to refinance into a lower interest-rate loan.

Nationally, home prices have fallen to 2003-levels, and half of the metro areas in the 20-city Case-Shiller Home Price Index have lost more than 20 percent of their values from their peaks in 2006. The Federal Housing Finance Agency also reported that prices saw their largest annual decline on record since 1991; dropped 8.2 percent from 2007 to 2008.

The Case-Shiller Report revealed that San Francisco saw home values lose more than 30 percent in December. In Alameda, those on the Island saw a 10% decrease from December 2006 to the same month in 2008. The year-over-year change was 4.3%.

December 2006 median $615,000

December 2007 median $588,000

December 2008 median $552,500

The more startling number is if you look at 24-months of median pricing and see the 20% swing from a high in September 2007 to the low in September 08. Because of the low sales volume in Alameda the swings in median can move pretty dramatically.

If you look at the Alameda 2007 median home price verse the 2008 you will see about a 7.5% decline in price. I think that this more of a reflection of the actual market, but we are seeing several individual properties with bigger declines. The next three months will give us a true feeling of the direction of the market as we enter the traditional buying season.

12-months 2007 median price $649,000

12-months 2008 median price $600,000

Video on the Industry reports

1 comment:

  1. Tumbling home prices are affecting markets everywhere, unfortunately. Let's hope the situation improves further into the year as we (hopefully) get closer to the bottom.