From CNN:
Home prices have posted another record decline, as most of the nation's largest
markets suffered double-digit drops over last year, a survey released Tuesday
shows.
The S&P Case/Shiller Home Price Index, which tracks 20 of the
largest housing markets, showed prices plummeting by 12.7% in the 12 months
ending February. That's the biggest fall since the index began tracking prices
in 2000.
Of those 20 metro areas, 17 posted their largest year-over-year
declines ever. Ten of the 20 cities posted double-digit dips.
The 10-city Case/Shiller index is down 13.6% year-over-year, the biggest drop since
its launch in 1987.
The latest Case/Shiller price index numbers are not very encouraging and show that, unfortunately, there is no sign of a bottom in the housing market in the immediate future; in fact, the latest numbers seem to indicate that the drop in home prices is accelerating on a nationwide basis.
Moderated by an increase in the city's population, however, home prices in Atlanta are still faring better than most - only shedding 5.6 percent of value from last year. Compared to the almost 23 percent drop in value in Las Vegas, that 5.6 percent decline doesn't seem too bad.
However, there remains the danger of a vicious circle leading to further, and steeper, price depreciation, even with Atlanta's relatively-moderate 5.6 percent drop in value. As price losses continue, houses become less desirable and lenders less willing to extend mortgages. Fewer potential purchasers result in additional downward pressure on prices - and with the numbers of foreclosures and vacant properties already at record highs and expected to increase, the momentum on house prices to continue to move lower could end up accelerating very quickly.
This is not to say that anything relating to real estate investing is a lost cause. There are certainly a tremendous number of individual deals out there – perhaps more than ever before. But the nature of the market is fundamentally different, and the realities of that market have changed drastically over the past year. Strategies that worked two years ago probably are not as effective today, but the good investors continue to adapt to the market at hand and succeed.
Photo: Blue Arrow on Red, originally uploaded by raumoberbayern.