The monthly Standard and Poors/Case-Shiller housing-price index came out today, and the news is particularly bad for Southern California. From the L.A. Times:
Las Vegas and Miami prices fell most sharply, posting a 19% yearly decline. But not far behind — with annual declines near 17% — were the Los Angeles area, which includes Orange County, and San Diego. The Case-Shiller Los Angeles index is now 18% below its 2006 peak.
The California Assn. of Realtors reported a February sales increase of nearly 10% statewide from January. But the February sales total was down a record 29% compared to February 2007. The median price of an existing California home fell 26% in February from a year earlier.
The sales uptick in February may look like a hopeful sign, but January historically is a slow month, and a jump from January to February isn’t unusual. It’s shaping up to be another difficult housing year.
The Case-Shiller data suggest that the national housing market remains in decline, said David M. Blitzer of Standard & Poor’s. “Unfortunately, it does not look like early 2008 is marking any turnaround.”
A Bloomberg News story on the same subject included more predictions:
Lehman Brothers Holdings Inc. forecasts home prices as measured by Case-Shiller will decline another 10 percent by the end of 2009. It predicts new-home sales will bottom in the middle of this year and existing-home sales and housing starts will reach a trough in the third quarter.
And more economists are acknowledging the R word:
Increasing numbers of economists are predicting that the economy has entered, or will soon enter, its first recession since 2001. Martin Feldstein, the Harvard economist who heads the research institute that determines when recessions begin, on March 14 said he thought the downturn began and would be the worst since World War II.