Although I am not an economist, sometimes the writing on the wall isn’t too hard to read. To me, this has never been truer than in the case of the current U.S. housing market. The U.S. overbuilt. Credit was way too easy, now it’s much harder to get. Unemployment is still high . . . . wash, rinse, repeat.
So, it really should be no surprise that the Standard & Poor’s/Case-Shiller 20-city index released yesterday shows price declines in 19 cities from December to January. This is also the 6th straight decline for the index. More specifically, 11 of the 19 are at their lowest level since the housing bust in 2006-07 and the average prices in 4 of them (Atlanta, Cleveland, Detroit and Las Vegas) are at their lowest point in 11 years. The housing recession is obviously not over.
To no surprise, the housing market is worse in cities where foreclosures and short sales are dominating the market, thus pushing home prices down. That includes Detroit and Cleveland, which are also struggling with weak local economies. Miami, Phoenix, Las Vegas and Atlanta are suffering more from the overbuilding during that took place during the housing boom.
However, there was 1 bright spot: The only market where prices rose was Washington D.C., where homes prices gained 0.1% month over month. Home prices in the U.S. capital are up 3.6% year over year and have risen nearly 11% since they apparently bottomed in March 2009. And of the 20 cities in the index, prices in D.C. have held up the best since 2000, appreciating almost 84%. California cities are also faring slightly better. San Diego was the only city besides Washington where home prices have risen year over year.
So, housing is pretty good if you live in San Diego or D.C., otherwise, good luck!