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U.S. Home Prices | Bank REO Real Estate
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Over 50% of U.S. Homeowners are still underwater

November 14, 2011 by · Leave a Comment
Filed under: Real Estate News 

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Let’s just say it, principle write-down is the only way forward for a housing recovery.  The amount of the loans are just not in-line with what the houses are worth.  We are going to continue to see more foreclosures and REOs as long as we keep these mortgages at such a high book value.  The main opposition to reducing principle, is that many banks will be forced to take write-downs and that would means the banks would need to raise capital.  Some of these financial institutions, might not be able to raise the amount of capital needed.  In that scenario, they would need to be either broken up or fail.

That is the reason why the most logical choice is the least attractive political option.  We need to learn that the pain is usually the first step in a recovery and the longer you put it off the more pain that accumulates.  The refinance programs can work if you think house prices are near stable levels and your mortgage was written near this level.  If not, who cares if you have a 1% mortgage on a house over-priced by 50%?  This is the path forward and when you start hearing the drumbeat for this course of action, then you know at least this problem is finally being tackled in a sustainable manner.

CNBC (Diana Olick) – Home prices are highly seasonal, due to the different mix of homes that sell at different times of the year, but the latest reading for September shows home prices are under added pressure now; this is not just due to the high concentration of distressed properties on the market.

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U.S. housing prices continue to decline

March 30, 2011 by · Leave a Comment
Filed under: Real Estate News 

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I was listening to Bloomberg TV this morning and they are all abuzz about the decline in housing prices.  The debate is whether we can have meaningful economic recovery without a housing recovery at the same time.   I don’t think we can for this reason.  We are all seeming to forget that our economy is still under the full support of the central bank through near zero interest rates and their bond purchase programs.   Our government has now given us a budget ($3.7 trillion) that now stands at 25% of GDP.

This tells me that our economy is very fragile and could not stand on its own and most likely would fall about without a housing price increase to help improve our citizens debt position by getting more equity in their pockets and bring the houses above water.   Things are so fragile that I think we have a 50% chance of another recession in the next couple years.   The indicator is oil prices, it is over $100 dollars a barrel and if you watched what happened when it hit $150.   It was a recession so I am pretty sure this will be the case again.   Hopefully this time we will let the bad debt defaults so we can heal the economy.

BBC News – Seasonally adjusted prices fell in 12 of the 20 metropolitan areas tracked by the S&P/Case-Shiller index.  In four cities, prices were at their lowest in 11 years, with the overall index down 0.2% in January from the previous month.

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U.S. Home Prices Up 5% Year-Over-Year

March 4, 2010 by · Leave a Comment
Filed under: Real Estate News 

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With jobless claims going down, consumer spending up and home prices rising, this may be a sign of an actual recovery.  To be sure, we still have need to see large gains in the job market to really believe we will have a sustained and durable recovery.

Let us not forget if we look at the U6 unemployment number, we have over 15% unemployment and that represents discouraged workers that have given up looking for work.  Once jobs start being created rapidly, those workers are going to re-enter the labor market and that will but a strain on the recovery.  We are walking a fine line right now and hopefully we can get through this without creating another bubble.

DS News – New data released by Clear Capital Thursday shows that home prices nationally are up 5.0 percent compared to February 2009.  The quarter-over-quarter price change for the numbers through last month was flat at 0.0 percent, indicating a softening during the winter months.

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Home prices fell 12% in the U.S. for 2009

February 11, 2010 by · Leave a Comment
Filed under: Real Estate News 

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CNN, New York – The real estate roller-coaster ride continued last year as the median price of U.S. single-family home plunged 11.9% to $173,200.

The housing situation had been looking up earlier in the year, with prices gaining ground in the first nine months. But the increases weren’t enough to push the median home price above 2008’s bar of $196,600, according to the National Association of Realtors.

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U.S. home prices plunge 16.6% in August

October 28, 2008 by · Leave a Comment
Filed under: Real Estate News 

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Well even though I know many people have a portion of their net worth tied up in a home purchase, I am glad to continue to see prices slide.  Currently, homes are very unaffordable for most Americans and trying to monkey with the real estate market to set a floor in prices is not the answer.  All that does, is hurt the people who are saving up a real down payment (15-20%) and make them have to go into more debt to buy a home.  In most except the most luxurious areas, homes prices should be between 3-4 times the median income in the United States.  Heck, even in the ritzy areas they should only be 3-4 times the upper class median income as well.  

People seem to have this idea in American that situations can only work for certain income brackets, when most times if you have sensible rules, it can work for almost everyone.  There is always exceptions but that is not how your properly regulate in a democratic republic. 

Reuters:

Prices of U.S. single-family homes plunged a record 16.6 percent in August from a year earlier and plummeted more than 30 percent in Las Vegas and Phoenix, Standard & Poor’s said on Tuesday.

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