U.S. Housing Prices Fell 2010 - 2011

U.S. Housing Prices Fell Again in January

Portland was one of 11 cities in the Case-Shiller index that reached another low for the current downturn in January. Prices fell 1.8 percent from December, pushing them back to 2005 levels.

“You do kind of wonder where the bottom is,” said Mr. Thoele. “Sellers know in the back of their mind that their home is worth less than at the peak, but they’re still a little surprised when you tell them their $400,000 house is now worth $300,000.”

Case-Shiller is a three-month moving average, which means it is resistant to quick changes. On a seasonally adjusted basis, January’s drop was 0.2 percent, the same as in December. In the slower winter months, the adjusted numbers are considered less indicative of the market’s true condition.

Prices were down 3.1 percent from their levels a year earlier. Only two of the 20 cities in the index recorded price increases during that time: Washington and, barely, San Diego.

US house prices fall in October, set to tumble further still

Atlanta was hit the hardest. Overall, house prices fell by 1.3 percent in the month.

in October and have dropped roughly 2 percent nationwide since June, according to data released by Standard & Poor's Tuesday.

Prices fell in October in every city in the index, from Miami and Washington to San Diego and Seattle. Overall, the 20-city index was down 1.3 percent for the month, and has fallen 1.8 percent since June.

Six metro markets – Atlanta; Charlotte, N.C.; Miami; Portland, Ore.; Seattle; and Tampa, Fla. – hit their lowest levels since home prices started to fall in 2006, although many other cities are still above lows reached in the spring of 2009.

"Although prices are falling again in all 20 cities, they are not in a freefall, as they were in 2007 and 2008," Patrick Newport, a housing analyst at IHS Global Insight, wrote in an analysis of Tuesday's numbers. The forecasting firm expects house prices to drop another 6 to 8 percent, he says, "and then turn around" after bottoming in 2011.

The Case-Shiller house price index is based on three-month moving averages, so October's readings may be only the second report to fully reflect the expiration of the federal tax credit, which helped to support housing transactions through June. The size of the price declines in October came as a surprise to analysts.

If the tax credit caused a kind of artificial rise and then fall in the housing market, other forces will now have a bigger effect on home prices going forward. Foreclosures and a glut of homes for sale are major reasons analysts expect modest home price declines to continue in many cities. But an improving economy could offset that trend, helping to buoy demand for homes as the job market improves.

Interest rates are a wild card. It's unclear if mortgage rates will keep rising, and thus diminish the amount that home buyers can afford to bid. Even though rising rates pose a threat to the market, in the short run they could lure some buyers into the market, as people worry that attractive rates may disappear.

Home prices have ridden a roller coaster over the past decade, with a dazzling upward surge followed by a harrowing bust in many markets. Prices in some markets have fallen sharply since 2006, but are still up for the decade, even after adjusting for inflation. Those include Los Angeles, New York, Seattle, Boston, and Washington.

Other boom cities have fallen harder, with home prices now down for the decade on an inflation-adjusted basis. Those are Phoenix and Las Vegas. In those cities, home prices are now roughly where they were in 2000, while a 27 percent advance would have been needed to keep pace with inflation.

Detroit has fared the worst of any city in the Case-Shiller index over the past decade, with prices down 31 percent even before adjusting for inflation.

Inflation Affects the Forex

The Forex market is influenced by many different factors. Because of the world wide economy, knowing the economic reports in Switzerland may be as important to one trader as what the Yen is doing against the US Dollar. Countries release economic reports to show the health of their local economies, and one of the major reports that all Forex traders look forward to is the Consumer Price Index (CPI).

For example, in an economy that started booming, similar to the way China has grown in recent years, more people make more money. They start buying more. Stores not directly affected notice this, and raise their prices. So the workers demand more money, the company pays more money, and the stores keep raising prices. Without any checks or balances, this economic boom can send the inflation through the roof. A CPI report can show this, and encourage the government and federal banks to counter.

The CPI can sometimes be affected by a large hike in price of one commodity. For example, the huge jump in oil prices in the United States. This affects transportation, heating, food, and cuts into retail sales because of the squeeze on workers' budgets. In that case, one major commodity jumping in price created a domino effect that the CPI would alert traders and investors to.

see this example on forex trading

The Great Britain pound recovered somewhat after it dropped on the speculation that the falling house prices signal about problems in Britain’s economy.



GBP/USD traded at 1.5434 as of 03:38 GMT today after it dropped yesterday from 1.5497 to 1.5366. GBP/JPY traded at 125.79 after yesterday’s decline from 126.47 to 125.46.