If you bought your home in 2002, on average spread across the U.S., your home has not gained a wink of value from that price nine years ago. That’s the latest from those good folks who bring us the Standard & Poor’s/Case-Shiller index and have now confirmed the Double Dip is documented.
High drama: it is the worst downturn since prices began spiraling. But remember what we are comparing it to: last year’s first-time homebuyer’s credit.
I know what the numbers say, but I challenge Realtors who read this blog to comment with real-life examples of sales that defy this claim. Have you sold any homes lately for more than they were in 2002? What about?
The index fell 4.2% in the first three months of 2011 after declining 3.6% in the fourth quarter of 2010. The first-quarter 2011 index decreased 5.1% from a year earlier.
And in March, the index fell from a year ago in 19 of the 20 metropolitan areas tracked by the S&P/Case-Shiller with a dozen MSAs reaching new lows. The only city to see a gain is Washington, D.C., where home prices in the puffed up nation’s capital rose 1.1% from February, up 4.3% from a year ago. That is because money and jobs are being created in D.C. Seattle home prices crept up 0.1% in March from the month prior, but are still 7.5% lower than a year earlier. And of course, economists are now calling it the Double Dip.
Dallas-Fort Worth was not spared: our average price was down 2.5% from a year ago.
Dallas average home price in March, 2011: $112.89.
That is 0.8% lower than prices in February.
That is 0.2% lower than prices in January.
And -2.5% lower than the average price of a Dallas home in March, 2010.
Here’s how the other cities in the 20 city composite fared – Minneapolis really took a hit.
I watched ABC News and Nightline tonight. The usual: reporter finds a couple looking for a house, asks them if they have given up on the great American Dream. Wouldn’t you rather rent? I am so sick of these of stories. What the bejesus do people think is going to happen when everyone is renting? Landlords will raise rents – in fact, rents are up by 6% in Dallas/Fort Worth. No, home ownership is not for everyone. You need to keep your feet planted on that dirt for several years, not flip the family homestead. If you anticipate a move in a year, two or three, by all means lease and you should always lease when you ever are uncertain about where you are buying. Want to live in a high rise? Lease one for a year. But as rents go up, leasing is just going to get more costly. Then, when it’s cheaper to own rather than lease, will people get back into home ownership with, hopefully, more stable financing? They will have to pony up 20 to 30% down payments. Without that, they will be stuck. Immobile. Nightline queried Neil Barofsky, an NYU law professor who testified in favor of the bank bail-out but now says our government has betrayed us: taxpayers bailed out the banks but the banks have not been supporting housing, as they said they would. Once again I ask: when are federal banking regulators going to loosen up home lending?
Interestingly, Bob Shiller may be immortalized as the man who changed the American Dream from home ownership to home rental with his constant psychological ownership bashing. He told ABC that he thinks home prices may even be lower in ten years than they are now.
Could that happen in Dallas/Fort Worth?