Here’s the lastest on the housing crash where home prices continue to free fall.
Where they stop nobody knows, but anyway you slice it the numbers are ugly and getting worse.
That’s more bad news for the banks since they can’t can’t begin to recover until housing bottoms.
Moreover, with declines now 20% or more in some of the biggest markets, a huge percentge of 2nd mortages and HELOCs have been completely wiped out.
The next stop is bigger losses in first mortgages as the average declines dig deeper into the 80% equity levels that were supposed to be “safe.”
The toxic stew grows.
Here’s the skinny.
From CNN Money by Les Christie entitled: Homes prices decline record 15.8%
“May home prices dropped a record 15.8% from a year ago, according to the S&P/Case-Shiller Home Price Index of 20 cities. It was the 22nd consecutive month of decline recorded by the index. Prices fell 0.9% from April to May.
Each of the 20 metro areas covered by the index posted annual declines; nine posted record lows and 10 cities recorded double-digit drops.
The Case-Shiller 10-city Index posted a year over year decline of 16.9%, and a 1% month over month dip. Both the 10-City Composite Index and the 20-City Composite Index are reporting record annual declines.
“Since August 2006, there has not been one month where we have seen overall price increases, as measured by the two Composites,” said David Blitzer, Chairman of the Index Committee at Standard & Poor’s.
Case-Shiller has been tracking the 20-city index for 19 years, while the 10-city index is 21 years old. The current price decline streak has been unprecedented in both length and depth. Starting in April 1990, the 10-city index streaked down for 10 consecutive months. But that total loss was just 6.5%.
Since the 10-city index peaked in July 2006, it has plunged 19.8%. The 20-city is down 18.4%.”
Here are the cities with the largest annual declines in prices:
Las Vegas -28.4%
Miami -28.3%
Phoenix -26.5%
L.A. -24.5%
San Diego -23.2%
The bottom in housing is nowhere in sight. All of the housing gains from 2003 and beyond are going to wiped out before its over.
By the way…..a few readers we a bit appalled yesterday when I said that the U.S. has become a banana republic. So just for kicks I looked it up to make sure I wasn’t going overboard.
According to Wikipedia a “Banana Republic” is one that typically has large wealth inequities, poor infrastructure, poor schools, a “backward” economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency.
That about sums it up doesn’t it?
