The decline in home prices accelerated and spread to more regions of the country in October, according to a series of private indexes released Wednesday.
Prices fell 6.1 percent from October 2006 in 20 large metropolitan areas, according to Standard & Poor’s/Case-Shiller indexes, compared with a 4.9 percent decline in September. All but three of the 20 regions saw real estate values fall, and even the three places ”” Seattle, Portland, Ore., and Charlotte, N.C. ”” where prices were up from a year ago saw prices fall from a month earlier.
The quickening decline in home prices could hurt the broader economy by leading to more foreclosures as homeowners have more difficulty refinancing mortgages and by sapping consumer spending as Americans feel less wealthy. But economists also noted that a faster descent from boom-era prices would allow the housing market to right itself sooner by removing vacant homes from the market.
Stocks fell modestly Wednesday in response to the latest home price data and on weaker than expected retail sales. The Standard & Poor’s 500-stock index was down 0.4 percent, or 5.32 points, to 1,491.12; the Dow Jones industrial average was down 36.09 points, or 0.3 percent, to 13,513.24.
“The one disconcerting thing about the number is the rate that prices are falling is accelerating,” said Patrick Newport, an economist at Global Insight, a research firm outside Boston.
It’s a correction, it’s just a correction — prices had gotten too high and now they are getting back.
I hate to be a zero-sum kind of guy, but for every up there’s a down and for every down, there’s an up. I hate the way the media always spin things — emphasizing the negative. When housing prices are on the rise, they are less affordable — when they aren’t it’s a decline in net worth.
Unintended consequences…lower home prices=lower property values=lower property taxes! Good for the consumer, until the purse-clutching pols decide it’s just another good excuse to raise the rates. Keep an eye on that gang of thieves!
All the loose money from the Fed’s easy policies through the ’90s has to go somewhere. Money left the stock market for real estate following the eBust of 2000; now it’s moving back into the market and flowing into the Saudi oil accounts to help finance their wretched Wahhabi madrasses, while inflation gradually builds here.
Never, ever forget the basic adage of economics (and many other fields): when something seems too good to be true, it is. There is nothing more expensive than a free lunch.