We have talked about the United States real estate market falling into a double dip recession for the past couple of years. We have worried about it, heck most agents and brokerages have had the night sweats over it.
Well folks, it is here.
From October to November, prices fell in 19 of the 20 metro areas tracked by the Standard & Poor’s/Case-Shiller index, widely considered a gauge of the housing market’s health. The only exception was San Diego, where prices were basically unchanged.
Only four areas posted year-over-year gains in November, including Los Angeles, San Diego, San Francisco and the Washington region. But in the aggregate, prices dipped 1.6 percent in November from the same time a year earlier, falling in 16 cities.
The nine cities that hit their lowest annual levels since the housing bust started were Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland, Ore., Seattle and Tampa. via the Washington Post
The biggest problem isn’t the prices dropping, that is the symptom. The biggest problem is that consumers will lose their confidence in the housing market.
That will be brutal. We gave billions of our tax dollars to home buyers and sellers to try to reassure them that housing was a good choice for their investment dollars. Even while mortgages were getting harder to get, buyers were coming into the market due to the low interest rates. Now it seems like they are willing to sit it out and watch.
Sure homes will get sold, but it is a question of velocity. For a market to work the velocity and confidence need to be there. Let’s hope that this downturn is short lived and the buyers return.
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