Home prices dropped throughout the nation in December 2010 – sometimes dramatically – according to the Case-Shiller home pricing index, which reports home pricing numbers for 20 cities nationwide, including California cities San Diego, Los Angeles and San Francisco. December’s price drop eliminates most of the tentative gains in pricing that were made in California over the course of 2010, although prices in all three California cities remain significantly higher than they were at the bottom of the recession in early 2009.
In the one month period from November to December 2010, prices dropped 1% in San Francisco, 1.4% in Los Angeles, and 0.7% in San Diego. In comparison, eleven other US cities posted their lowest home pricing since the recession’s start. Only Washington, D.C. registered a rise in housing prices. [For detailed home pricing numbers, see our Market Chart, California Tiered Home Pricing.]
The drop in home sales, which comes after a brief rise for many cities in early 2010, can likely be attributed to the expiration of the homebuyer tax credit earlier in 2010, reports the New York Times. The tax credit attracted numerous buyers to the market, but did nothing to ensure a sustainable recovery. Instead, buyers were merely front-loaded, cannibalizing current sales volume and thus causing prices to drop.
Some other price-reporting organizations, most notably the National Association of Realtors (NAR), have reported significantly higher home pricing figures. However, the Case-Shiller index (as well as numbers calculated independently from recorded data by First
American’s CoreLogic) cast doubt upon NAR’s rosy data, indicating the lull in nationwide home pricing is likely far from over.
first tuesday Take: The price drops in recorded sales reported by the Case–Shiller index are well in line with first tuesday’s own predictions for the real estate recovery. This recovery will be lengthy and slow (lasting well into 2013 before sales volume picks up, with prices following within one year), and prone to minor quarterly minor and falls as the economy struggles to regain its footing.
Trade unions do a disservice to the real estate industry when they attempt to defy the facts with unreasonably optimistic numbers. Such figures have consistently been wide of the market since the real estate price crash began in 2006, and will continue to be wrong for as long as they underemphasize the real magnitude of the housing market’s fall – both in California and nationwide.
Re: “Home Prices Slid in December in Most U.S. Cities, Index Shows” from the New York Times
Hello Tom I agree with your comments on 3/4/2011. Also you said that non members could belong to the local multiple listing service. Would you please elaborate for us uninformed, so I dont have to throw away about $1000.00 a year to belong to my local MLS???
a year to belong to my local MLS?
I agree with the author’s terminology that NAR along with its state and local affiliates is indeed a trade union. While I’m a long time CA licensed real estate broker, I eagerly left the union once the courts decided that non members could belong to the local multiple listing service. While some of the lobbying is OK, the NAR PR, reports, and data has always been suspect. The CAR legal department is pretty good, except for any part they play in developing the CAR forms. The purchase and sale agreement is ridiculously long and, as Tom McCarty posted, is largely unenforceable due to the many arbitrary and unclear sections.
There are close to 19,000 professional organizations in the US, NAR and CAR being two. We are constantly encouraged by them to lobby lawmakers for favorable legislation. And then we wonder why we get 2,000 page bills from congress, and a tax code with 50,000 pages.
NAR and CAR are in fact unions. Perhaps not like public sector unions that we read about but a union none the less. Our country is a u ion of states. When you belong to a union, certain rights are given, few received. Dues may be required and the expenditure of the funds is not your concern… They both use funds to elect liberal or like minded puppets to promote their agenda. As a long time member I did receive access to health Insurance when denied by private plans. Over all I was satisfied, except for the liberal political donations and the always rosy outlooks on housing. I always thought they played the public and considered it advertising. We also had some of the best legal in the nation in Ca. When the contract to buy was watered down to nothing more than a bu ch of promises with no force or … It became a joke. It was not a contract by any legal standard. Buyers would quite multiple offers and sellers could not enforce due to all the weasel clauses. Just a historical fact, things degrade and we must start over in the future once sanity becomes the norm.
Also Mr. Carroll let me say I read the articles here at First Tuesday because I feel they are usually spot on where the economy is going without all the CAR and NAR cheerleading. I never waste time reading our organizations propaganda any more they lost my respect years ago when they worked so hard against private property rights issues. PAC money to them is a waste. Remember the rallied Washington and proudly told us how great this deregulation they spent PAC money on lobbying all this stuff that caused the problems we face today. They called it inclusionary housing for everyone. No matter if they could afford it or pay for it. So here we are facing the problems that were caused by these people. Probably they may have had good intentions but they were wrong.
He is absolutely correct Mr. Carroll. Besides he is also correct that prices will continue to fall as long as the Obama administration and the banks control supply by holding back the great numbers of foreclosures they should be processing. They are artificially limiting supply in an attempt to keep prices from falling to where they need to fall to make the values sustainable. I explain it like this the past market was not real due to the politicians and banks making loans to people who never really qualified for the loans and cheerleaded on by CAR and NAR the market was not sustainable so it was inevitable that it fall. I predicted the fall and people called me Chicken little too. It is simple A + B = C. A represents the income of the buyer, B the lending guidelines or lack of they effect C the price of a home. So while incomes never rose the government and CAR and NAR lowered the qualifying guidelines so anyone could buy. So the supply of C remained slightly constant but the buyers rose in huge amounts to buy limited products. So the crazy price increases which were never sustainable. Funny how everyone talks about sustainable growth and the greenies sustainable environment but never the sustainable smart lending practices we should all embrace to stabilize the economy. Prices will fall in a free market society to where they become sustainable once again. The Government and our lame organization should stay out as well. Let the free market settle where it may.
What union? NAR? A union? That would be laughable if it wasn’t so ridiculous. Teach this guy some semantics before you let him publish anything else.
And why do the Chicken Littles squalk over a variation in A MONTH!!! Someone that that supposedly understands charts, statistics, trendlines, etc knows that month-over-month variances are basically meaningless. Instead of accusing the Realtor “trade union” of “underemphasizing the real magnitude of the housing market’s fall”, he should accuse himself of joining the unfounded media histeria of overemphasizing the meaning of a meaningless statistical variance.