Housing Market Continues to Suck

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HOUSING MARKET CONTINUES TO SUCK….Housing prices are still plunging:

Home values in 20 large metropolitan areas across the country dropped at a record pace in October as the fallout from the financial collapse reverberated through the housing market, according to data released Tuesday.

….”October was clearly the free-fall month,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “Everything was going against us in October, without exception.”….Prices are falling at the fastest pace on record, a sign that the housing market is a long way from recovery.

The housing market is obviously in terrible shape, but for what it’s worth, I think the idea that October was uniquely bad is slightly miscast. As you can see in the Case-Shiller index at right, housing prices began plunging at a rate of 2-3% per month in October 2007, moderated a bit starting in May 2008, and then resumed their 2-3% monthly decline in September. It’s not so much that we’re suddenly seeing record declines, as it is that the record declines that started last year got interrupted for a few months this summer and are now back in business. But this is no surprise: the Case-Shiller index is still only down to 158, and we’ve always known that it’s not going to stop much before it gets into the 100-120 range. What’s more, rapid declines aren’t entirely bad news. We’re probably better off getting to 100 sooner rather than later, since economic recovery almost certainly can’t start until housing prices bottom out.

In the meantime, of course — and I say this as someone currently trying to sell a house — the news is grim every direction you look. Even at 2-3% per month, we’ve got at least another year before the housing market starts to reach its natural level. Until then, we’re screwed.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

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