With all the media coverage of the BP oil spill, Afghanistan, DADT faux Repeal, and other things, a continued time bomb is ticking in the U.S. economy - the continued problems in the residential real estate market where prices have dropped six months in a row. As prices fall, more and more families find themselves "underwater" and unable to refinance high interest loans or even sell their homes if transferred for their jobs. *
As for the alleged programs to assist homeowners in trouble avoid foreclosure via a loan modification, etc., they are little more than a joke. From working with clients I can personally attest that the level of incompetence and total disorganization at mortgage companies defies belief. With some lenders, like Bank of America from my experience, the right hand has no clue what the left hand is doing and homes go to foreclosure sale even when loan modifications have supposedly been successfully negotiated. It is a circus. Wall Street got billons of dollars in bailouts, but rank and file Americans get tossed on the trash heap. And as more homes go to foreclosure, the downward pressure on prices continues and digs the hole even deeper. Here are some highlights from a Washington Post story:
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The Standard & Poor's/Case-Shiller home price index showed that prices of single-family homes were down 0.5 percent between February and March, the sixth consecutive month-over-month decline. On a seasonally adjusted basis, prices were flat, according to the index.
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Prices in 13 of the 20 cities tracked by the index fell in March, including the Washington region, where prices were down 0.7 percent. Detroit and Minneapolis saw the largest price declines, 4.1 percent and 2.7 percent, respectively.
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The recent weakness in prices is disappointing given record-low mortgage rates and a home buyer tax credit that helped boost sales through the first few months of this year, analysts said. The tax credit expired last month, and home sales are expected to decline in its absence.
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There is still an oversupply of homes on the market, particularly foreclosures, said Patrick Newport, U.S. economist for IHS Global Insight. Foreclosed properties typically sell at a discount, bringing down neighboring home values.
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The "housing glut and foreclosures" will drive the Case-Shiller index down another 6 to 8 percent before reaching bottom in 2011, Newport said. "Prices appeared to stabilize late last year, and they are now starting to edge down again," he said. "With the tax credit gone, sales are going to drop, and we're going to see that trend continue."
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Overall, home prices are likely to gradually fall an additional 5 percent through the end of 2011, said Paul Dales, an economist at Capital Economics. "I don't think we're going to get anything like the crash [in prices] we had before," he said. "It won't be a disaster, but it will undermine the wider economic recovery."
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The Standard & Poor's/Case-Shiller home price index showed that prices of single-family homes were down 0.5 percent between February and March, the sixth consecutive month-over-month decline. On a seasonally adjusted basis, prices were flat, according to the index.
*
Prices in 13 of the 20 cities tracked by the index fell in March, including the Washington region, where prices were down 0.7 percent. Detroit and Minneapolis saw the largest price declines, 4.1 percent and 2.7 percent, respectively.
*
The recent weakness in prices is disappointing given record-low mortgage rates and a home buyer tax credit that helped boost sales through the first few months of this year, analysts said. The tax credit expired last month, and home sales are expected to decline in its absence.
*
There is still an oversupply of homes on the market, particularly foreclosures, said Patrick Newport, U.S. economist for IHS Global Insight. Foreclosed properties typically sell at a discount, bringing down neighboring home values.
*
The "housing glut and foreclosures" will drive the Case-Shiller index down another 6 to 8 percent before reaching bottom in 2011, Newport said. "Prices appeared to stabilize late last year, and they are now starting to edge down again," he said. "With the tax credit gone, sales are going to drop, and we're going to see that trend continue."
*
Overall, home prices are likely to gradually fall an additional 5 percent through the end of 2011, said Paul Dales, an economist at Capital Economics. "I don't think we're going to get anything like the crash [in prices] we had before," he said. "It won't be a disaster, but it will undermine the wider economic recovery."
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