Today's Wall Street Journal Page One story is ominous!
Home Prices Fall Nationwide. Consumer Confidence Sinks. And Most Potential Home Buyers Still Wait on the Sidelines!
Here in Chicago, the negative drumbeat isn't as loud. According to the latest Standard & Poors Case-Shiller Home Price Index, just completed providing April statistics, the average home price in the Chicago IL Metro Market declined 9.3% for the year ending in April, 2008. There was actually a slight (0.1%) improvement to the index here in April.
Across the country, according to statistics compiled by Standard & Poors, in their Case-Shiller Index of Home Prices, the prices of single-family homes in the 20 Top Metro Areas they survey slid 15.3% in April, versus April, 2008. On average, across the U.S., home prices are about what they were four years ago - in 2004.
In a separate survey, the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac-backed conventional mortgage loans in a broader cross-section of the U.S., urban and rural, found their average home prices fell 4.6% year over year in April - their lowest measured level since 1991.
The benchmark for the Case-Shiller Index is January, 2000 - 100 points. The April index for Chicago was 151.44, indicating an average home appreciation of over 51% in the past 8 1/2 years. By comparison, the New York Case-Shiller Index for April was 193.93, for Los Angeles - 202.52. Miami - 200.42. The index was 93.79 in Metro Detroit, indicating home price depreciation in that market since 2000. Unlike Chicago, these other metro areas experienced index declines in April.
The largest one-year price declines were in Las Vegas (26.8%) and Miami (26.7%). The California Metro Areas of Los Angeles, San Francisco, and San Diego, as well as Tampa FL, each experienced year-to-year drops exceeding 20%.
Boston, Portland OR, Dallas, Denver, and Seattle each showed stable or slightly improving index numbers in April, versus March, 2008 - like Chicago.
Here is a link to the latest Standard & Poors Case-Shiller Home Price Index.
Not unrelated to the continued sluggishness in the Real Estate and Credit Markets, Consumer Confidence has fallen to its lowest level in 16 years, according to the Conference Board, a New York business research. In June, their Consumer Confidence Index dropped 7.3%, to 50.4, from the May, 2008 level of 58.1.
The Conference Board benchmark is based on 1985 figures. Consumer Confidence peaked last July, at 111.9. Their research suggests that consumers' anticipation of the state of the economy six months from now dropped to its lowest level since the Board began their surveys back in 1967.
Potential home buyers continue to remain on the sidelines! Only 2.2% of those surveyed by the Conference Board plan to buy a new home within the coming 6 months. In addition, fewer consumers plan to purchase a new car, major kitchen appliances, or even take a family vacation, between now and the end of the year.
Concerned about economic growth, along with the threat of continued inflation, the Federal Reserve Board is expected to leave it's key Fed Funds Rate unchanged when it concludes its two-day policy meeting today. Lowering rates might have some mid-term impact on interest rates for some mortgage and business loans, but dropping rates too far could spark higher inflation - already exasperated by ever-increasing prices for food and gasoline. At this moment, the Fed Funds Rate stands at 2.00%.
Read more via BlogChicagoHomes.com, and click for rich links for content and video in today's Wall Street Journal, including coverage by reporters Kelly Evans and Anton Troianovski.
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