Housing Prices Decline Sharply in July
A decline in U.S. home prices sped up across the nation in July, leading to the sharpest drop in 16 years. The Associated Press reports that the S&P/Case-Shiller home price index of 10 cities out today shows a 4.5 percent drop from last year.
In the index of 20 cities, there was a 3.9 percent decrease. According to the report, prices are still rising in five of those cities: Atlanta; Charlotte, N.C.; Dallas; Portland; and Seattle — but Atlanta and Dallas are close to moving into negative territory.
The results of a Reuters/University of Michigan survey last week shows that today's news will come as no surprise to many homeowners. In the survey, 26 percent of homeowners said the value of their homes has fallen in the past year, while 21 percent said they expect their homes' value to fall in the year ahead.
But Diana Olick writes at CNBC that, as big as that 26 percent figure is, it only shows that the other 74 percent of homeowners are not facing the reality of the situation.
Sellers are stubborn; they just don't get it. Prices during the boom were unsustainable, affordability is now ridiculous, and continued price appreciation makes no economic sense in the current atmosphere. The boom-time price inflation in homes was thanks to a faulty mortgage system, which is now in the process of righting itself, and home prices rightfully have to fall in line. Do I like writing those words? Hell no! I own a home. I like money. I also like logic. Sue me.
11:24 AM ET | 09-25-2007 | permalink
