People have tried to take me to task when I differentiate between stocks and houses. The half joking quote is "The difference between stocks and houses is, outside of Love Canal & Detroit, houses don’t go to zero."
As you can see from the attached web page listings, that is only the slightest of exaggeration, as there are quite a few house in Detroit for sale at $100 each.
And, if you search for $0 – $5,000 price range in Detroit, MI, you will find 1,397 properties in that range, out of 20,881 properties for sale.
Why is "zero" only a sleight exaggeration? Renting an apartment (no property tax, no maintenance obligations, no heating costs) is cheaper in Detroit than owning a home — even one that costs $100 . . .
click for more listings
Detroit, MI Property Listings
NATIONAL ASSOCIATION OF REALTORS
My pal Nouriel Roubini, of NYU and RGE talks with Bloomberg about the outlook for a U.S. recession and the housing market.
click for video
Roubini Says U.S. Recession May Last Up to Six Quarters
Bloomberg, February 26 2008
This is hysterical:
That’s gonna leave a mark: Data through December 2007 for the Case-Shiller Home Price Index shows broad based declines in the prices of existing
single family homes across the United States. This marks 2007 as a full
year of declining home prices.
As the chart above shows, annual returns of the national home price indices declined -8.9% versus the 4th quarter of 2006. This is the largest decline in
the series’ 20-year history. Comparatively, during the 1990-91 housing recession, the
annual rate bottomed at -2.8%.
“We reached a somber year-end for the housing market in 2007,” says Robert J. Shiller, Professor at Yale University and Chief Economist at MacroMarkets LLC. “Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak, with 17 of the 20 metro areas reporting annual declines and the remaining three reporting flat or moderate growth rates. Looking closely at these negative returns, you will see that 14 of the metro areas are also reporting record lows and eight are in double digit decline. The monthly data paint a similar picture, with all metro areas now reporting at least four consecutive negative monthly returns.”
Damn that Shiller! He’s way too negative. All these professorial types, with their confounded data and confusing logic — they are so pessimistic! When are these academics gonna start being more balanced?
Existing Home Sales "Slipped" 23.4%
Monday, February 25, 2008 | 10:41 AM
Year End Numbers Mark Widespread Declines
S&P/Case-Shiller Home Price Indices, February 26, 2008
Home Depot Profit Drops on U.S. Housing Slowdown
Bloomberg, Feb. 26 2008