Elk Grove foreclosures and plummeting prices
By Thom Nadeau “A DESTABILISING contraction in nationwide house prices does not seem the most probable outcome...nominal house prices i...
https://www.elkgrovenews.net/2008/05/elk-grove-foreclosures-and-plummeting.html
By Thom Nadeau
“A DESTABILISING contraction in nationwide house prices does not seem the most probable outcome...nominal house prices in the aggregate have rarely fallen and certainly not by very much.” Alan Greenspan, 2005
The maestro himself uttered these very words. Greenspan, along with every self-serving real estate agent and mortgage broker seemed to believe we had somehow entered a new era of financial invulnerabilty.
Didn't we hear these same sort of word from the now all discredited stock analyst during the dot-com bubble of the late 90's? Looks like Greenspan was just another shill for Bush and company.
Greenspan's comments came from a story in The Economist that noted today's real estate market declines were last seen during the Great Depression:
Unfortunately, new figures this week reveal that house prices have already fallen by more over the past 12 months than in any year during the Great Depression. The S&P/Case-Shiller national index fell by 14.1% in the year to the first quarter. Admittedly, other property indices show smaller drops, but most economists now favour this measure. The index goes back only 20 years, but Robert Shiller, an economist at Yale University and co-inventor of the index, has compiled a version that stretches back more than a century. This shows that the latest fall in nominal prices is already much bigger than the 10.5% drop in 1932, at the worst point of the Depression.
Meanwhile, things in Elk Grove are continuing to reflect the real estate meltdown. According to Data Quick News, real estate prices in Elk Grove dropped 32% annually from April '07. The median price dropped from $407,000 to $278,500
As if things weren't bad enough, gas prices continue to spiral out of control. Gas prices have reached as high as $4.39/gal. in Elk Grove.
Can $5.00/gal be far behind?
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One item to note regarding the Sacramento house sale price declines. Notice that the more sales, the steeper the decline in prices. I think tha may be due to a combination of factors. The fewer houses sold the narrower the mathematical sample. Also, the fewer sold may indicate that banks and realtors are keeping empty homes off the market to preserve as high a price as possible on the few sales that are taking place. Think of it this analogy. If a cop is parked in front of a bar at night and the barkeep isn't ejecting the accumulating number of throwing-up drunks, the cop writing up reports outside is more likely to think everyone inside is well behaved and responsible. Only when 1:50 a.m. rolls around and the puking trash has to be tossed out does it become clear for all to see how rotten that saloon crowd was.
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