The Housing Double-Dip

http://online.wsj.com/article/SB10001424052702303657404576357170425058088.html?mod=WSJ_hp_LEFTTopStories

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"Nothing travels faster than the speed of light with the possible exception of bad news, which obeys its own special laws." (Douglas Adams)

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And, of course, the master of bad news is Nouriel Roubini who predicted a "double-dip" recession brought on by multiple causes one of which was the housing situation that, until foreclosure sales clear the market, will remain bad. The Case-Shiller home-price index (now owned by S&P) confirmed today what many had already concluded: "This month's report is marked by the confirmation of a double-dip in home prices across much of the nation. Home prices continue on their downward spiral with no relief in site." (David M. Blitzer, chairman of the S&P Index Committee)

Twelve of the 20 metropolitan areas tracked in the index posted new lows in March, and prices nationally have fallen 5.1% in the last year, pushing them back to 2002 levels.

The CoreLogic index, which is used by the Federal Reserve, shows that prices in March were down 7.5% from a year earlier. Excluding distressed sales, prices were down 1%.

Sadly, home ownership has dropped from its all time peak of 69.2% (2004) to 66.4% today.

So, overall, nothing's changed in the housing market. Again, at the $500,000 and up level, things are moving but that volume won't move the overall market.

If banks keep pushing foreclosure sales, the market will continue to drop. The light at the end of the tunnel is that, at some point, buyers will come in because prices for homes will get so far below "real value" that purchasers will be attracted back to the market.

We'll see when that is.