Home price index posts largest-ever decline

[Pale Blue Dot]

Source: MSNBC

WASHINGTON - U.S. home prices posted their sharpest first-quarter decline since the government began tracking the data 17 years ago.

The Washington-based Office of Federal Housing Enterprise Oversight said Thursday that home prices fell 3.1 percent in the first quarter compared with last year. The index also fell 1.7 percent from the fourth quarter of 2007 to the first quarter of 2008, the largest quarterly price drop on record.

"The large overhang of real estate inventory awaiting sale continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation," Patrick Lawler, the agency's chief economist, said in a prepared statement.

Prices fell in 43 states, with California and Nevada showing the biggest declines. Home prices dropped by more than 8 percent in those states.



Read more: http://www.msnbc.msn.com/id/24776011/

[truthisfreedom]

1. bushco... the zero-equity, no accountability administration.

[Javaman]

2. Here comes the higher property taxes...

so the prices decline, however, while the prices were up, the cities were reaping the rewards of higher property taxes.

well, now that houses are in foreclosure and owners are just plane abandoning them, there will be, no doubt, short falls in city budgets all over the nation and those short falls will need to be made up.

So how is that done? by raising the appraisal numbers on existing homes.

Joe Blow buys house 10 years ago in marginal neighborhood. Marginal neighborhood doesn't change much but people in marginal neighborhood had fixed rate mortgages and are all on time.

suddenly, the bottom drops out on the ARM bubble and there is a vacuum in taxes.

Joe Blow whose house was worth say, 110K last year, is now appraised by the city as being 150K.

WTF? says, Joe Blow. how do they justify this bullshit?

So Joe Blow goes and gets his own appraisal done and guess what? the real value? 115K. Whoops! someone fucked up, right? wrong.

Here in Austin where I live, many of my friends have had huge jumps in their appraisals. Myself, I had about a 5k rise. One friend had a 47K rise!!!! WTF???

This is how it works. Texas doesn't have state taxes. So that money has to come from somewhere.

Dallas and Houston have had far more problems with ARM's then we have. So no doubt they are a little more freaked out about ARM's then we are. So they need money.

So what happens? Austin, San Antonio, El Paso, etc. raise the appraisal value of homes to make up for the short fall in those other cities.

Problem is: people here are wise to the bullshit and are going to private appraisal companies to get their own and fight the cities.

end of the day: cities will be cutting back on services do to budget short falls that were based on imaginary money from over inflated property taxes that resulted from overwhelming greed by those cities.

The next shoe to drop.

[slackmaster]

3. It doesn't work that way in California

Proposition 13 protects homeowners from that kind of abuse.

[Javaman]

4. good for you! given San Diego's problems, that's a life saver. nt

[slackmaster]

5. If they could raise property taxes, they'd be all over it like flies on shit

Bastards.

[Vinca]

7. It's not the value of the house that changes, it's the tax rate per thousand.

Fewer people to pay the bill, the higher the rate.

[soothsayer]

8. or they just raise the property tax rate. that's the game around here

[Javaman]

9. That's exactly it. It has nothing to do with the worth of the house or land. nt

[cliss]

6. Just the beginning.

Expect more price drops. Lots more.

I've read that experts expect real estate prices to continue dropping all the way through 2008. Same thing with 2009.

They are expecting the market to start recovering sometime in 2010.