Zillow claims Home Prices Have ‘Double Dip’ in 12 U.S. Cities
Twelve U.S. cities, including Boulder, Colorado, and Providence, Rhode Island, are showing extended declines in housing values, reversing signs of a sustained recovery last year, according to Zillow.com.
The number of markets in a “double dip” jumped in January from five in December, data released today by Seattle-based Zillow show. The real estate information provider defines a double dip as five consecutive price drops after at least five straight monthly increases. The gains must be preceded by a period where values fell in at least 10 of 12 months.
Home prices nationally dropped 0.6 percent in January from the prior month, the Federal Housing Finance Agency said yesterday. Government efforts to bolster the market spurred a 4.9 percent rise in home sales last year, the first annual gain since 2005, according to the National Association of Realtors.
The double dip through January also was seen in Colorado Springs and Greeley, Colorado; Augusta, Georgia; Columbus, Ohio; Harrisburg and Lancaster, Pennsylvania; Little Rock, Arkansas; Green Bay, Wisconsin; Greensboro, North Carolina; and Lincoln, Nebraska, according to Zillow.
Ten other markets, including Boston and Denver, “seem poised for a double dip,” the company said. Zillow still expects home values to bottom out by June, said Humphries.
Bottom Out In June? Why?
What possible reason can anyone have to think home prices will “bottom out in June? Perhaps a better question is “June of what year?”
There is a massive amount of shadow inventory, the job market sucks, we had a housing bounce because of $8,000 tax credits, that bounce is dead, and home prices are still way above rental prices and wages.
But hey, it could happen. Just don’t bet on it or even predict it.
Good Riddance to 40-Year Fed Veteran Donald Kohn
When it comes to housing bubbles, the Neanderthal Award must go to Donald Kohn for his statements on combating bubbles.
Federal Reserve policymakers should deepen their understanding about how to combat speculative bubbles to reduce the chances of another financial crisis, the central bank’s outgoing vice chairman said Wednesday.
Donald Kohn said the worst crisis to hit the country since the 1930s points to the need for more research on how higher interest rates can be used to limit financial speculation. Kohn suggested that, and other “homework assignments,” in remarks prepared for a lecture at Davidson College in North Carolina.
Given the limited research, Kohn said he favors using regulation to prevent new speculative bubbles from developing that could burst and plunge the economy into a recession. Higher rates could be used if stronger regulations don’t work, he added.
A 40-year veteran of the Federal Reserve system, Kohn plans to step down at the end of June.
Here’s The Deal
1. If interest rates are too low, too long, there will always be huge speculation somewhere.
2. Regulation cannot fix a liquidity bubble, the money will just find a home somewhere else.
3. Neither Greenspan nor Bernanke believes it was possible to spot a bubble. Bernanke certainly proved that in spades, not seeing a housing bubble or a recession coming.
4. Yet Kohn wants to regulate what the Fed cannot even see
The thing is, anyone in their right mind could have and should have seen the housing/credit bubble.
Flashback 2000 to the dotcom bubble. Pray tell what regulation could have prevented that especially when idiots at the Fed were slashing rates all concerned over a Y2K scare that any programmer worth his salt knew was being properly addressed?
OK Kohn have at it.
And while you are pondering that, how the hell did you miss the housing bubble?
The Fed has no freaking idea what it is doing with interest rates, whether they are too low or too high, and it is going to pass real-time regulation to address bubbles it cannot even see!
Kohn, you should have retired 40 years ago. That is simply pathetic.
Mike “Mish” Shedlock
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