Housing market? Still going down.

[randomness]

Remember the housing market? Its collapse started this avalanche.
Well, it hasn't stopped falling:

From Standard and Poors, via FT Alphaville:

All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004. As of September 2008, the 10-City Composite is down 23.4% from its peak, the 20-City Composite is down 21.8% and the National Composite is down 21.0%.

"Take appropriate action," as my old boss liked to say.

Edit: Barry Ritholtz adds:

Las Vegas and Phoenix saw drops of more than 30% year over year; 29.5% drop in San Francisco and 28.4% fall in Miami led the pack of mean reverters.

Prices in New York fell 7.3% y/o/y and 5.7% in Boston. The smallest decline was in Dallas, down 2.7%.

The 30 yr FNMA mortgage rate is down now 37 bps today to 5.04% — that is the lowest since mid-September, right after the FNM/FRE conservatorship idea was floated.

Comments

[drwex]

I think the appropriate action is "do nothing." While housing prices are falling, home sales are up.

I'd like to see action taken to prevent foreclosures and keep people in their primary residences, but beyond that I see this as a much-needed market correction. Yes, I've lost about 1/3 of the estimated "value" on my home but so what.

If prices go down and more people buy homes that will go a long way to reduce the current glut. Housing starts are also way down, which I take as a further good sign (though I realize it sucks for people in construction and related industries).

Once we achieve a more realistic balance between price and supply I expect to see housing prices start to rise again.

[r-ness.livejournal.com]

The beauty of the phrase "take appropriate action", at least as used by my ex-boss, is that it gave us great latitude for us to exercise our own judgement. There were times when the appropriate action was to do nothing at all.

He was a great boss. He really meant "do what you think is best and I'll back you up", not "I'm not telling you what to do so I can wash my hands of this one".