In October, Home Prices Fell at Record Pace

NYTimes article

Home values in America’s 20 largest metropolitan areas plunged at a record pace in October as the fallout from the financial collapse reverberated through the housing market, according to data released on Tuesday.

The price of single-family homes fell 18 percent in October from a year earlier, according to the closely watched Standard & Poor’s/Case Shiller Housing Index. All 20 cities reported annual price declines in October; prices in 14 of the 20 metropolitan areas surveyed fell at a record rate.

“The bear market continues; home prices are back to their March, 2004 levels.” David M. Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement. The 10-city index dropped 19.1 percent, its largest decline in its 21-year history.

Incredible. Something to tell the kids in your old age. "I lived through the 2008-10 recession", or possibly the "2nd Great Depression", who knows. Then again, the drop in real estate values are really regionally isolated. The severe home value declines are mostly in CA, NV, AZ, and FL, plus Detroit. NYC values have held over the past year, but are just STARTING to feel ripple effect from the Oct/Nov 08 financial fallout. Actually, I'm guessing October number don't take into account the "true" decline in October. The houses that sold in October were probably contacted 4 to 6 weeks prior at a minimum. The "true" real estate declines due to the Oct/Nov 08 financial fallout, especially in NYC, should be know in early 2009.

On the bright side, the stock market doesn't seem to be reacting to this negative news, possibly indicating it has already accounted for this information. It also looks like the credit markets, EVER SO SLOWLY, are starting to "correct themselves". The Federal Bailout have saved the financial institutions, but it also locked in the losses. The default component of interest rates will continue to be high to pay down historical loan losses.