Inquiring minds are taking in a Denver Post article on the S&P/Case-Shiller 20-city index report released Tuesday showing home prices declined in 18 of the 20 cities. Even San Francisco and San Diego, which had posted strong increases just a few months ago are now seeing falling prices:
“Unemployment is still high, people are afraid of losing their homes and credit is hard to get,” said Maureen Maitland, vice president of Standard & Poor’s indices.
Not surprisingly, the falling prices were blamed on foreclosures:
The biggest weight on prices going forward is foreclosures, which sell at steep discounts and lower nearby property values. About 2 million loans are in foreclosure, and another 2.4 million borrowers have missed at least 90 days of mortgage payments, according to LPS Applied Analytics.
California looks to beginning the second leg down now that the federal tax credits have been removed from the market:
The outlook for California’s cities is more mixed. Three California cities in the Case-Shiller index — Los Angeles, San Diego and San Francisco — have seen home prices rebound sharply in the last year.
Yet, prices have softened in the last two months in those cities. Demand has weakened since federal home-buying tax credits expired in the spring. The Case-Shiller index is a moving, three-month average. The September figures are comprised of prices in July, August and September, so it would be the first month to show the full impact of the end of the tax credits.
“It doesn’t surprise me. The market around here in the spring was quite strong. You could almost call it hot. Now I actually have noticed there’s definitely a slowdown going on right now in real time,” Darin DeRenzis, a partner with L.A.-based Peninsula Sotheby’s International Realty.
If we could only live in a socialist command economy where subsidies could continue forever, eh?
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