The new Case-Shiller housing price data was recently released, and cities like Los Angeles are still reporting housing price declines of 22 percent. Miami is down almost 29 percent.
S & P’s spokesman declared that “we see no evidence that a recovery in home prices has begun.”
These are March numbers, and I’m pretty sure that “popular” economists have been declaring the economy at bottom since at least March. We’ll see what April numbers say, but the enthusiasm over the imminent recovery is perhaps misplaced.
With so few people qualifying for mortgage loans, and with so many people with terrible credit and massive consumer debt, it’s difficult to imagine the scenario that will lead to all the excess housing inventory being mopped up any time soon.
UPDATE: The mortgage bankers association released new data today showing that mortgage defaults are in no danger of going down. As noted in the comments, it is of course a good thing that home prices are going down because that indicates that some of the malinvestment due to the bubble is being repaired. However, the malinvestment has been so incredibly bad, that the continuing decline in prices indicates that we still have a long way to go. As long as prices are moving down, it’s a pretty good indicator that the bubble has still not been repaired and recovery is not on the horizon. What we need is a fast and steep fall in prices, but the bailouts ensure that we’re in for a long, prolonged ordeal instead.