Home prices in many cities continued to plunge by record levels in January as sellers cut their asking bids and rising foreclosures took their toll, new data showed Tuesday.
While the spring selling season usually gives the market a bounce, some analysts say any notable improvement may not come until well into the summer. U.S. home prices fell 10.7 percent in January, and the Standard & Poor's/Case-Shiller home price index of 20 cities saw the steepest decline in the index's two-decade history.
Here's a chart of the price gains/losses for the index in the big cities:
Let's take a look at the chart for the US:
Notice the following:
-- During the 1990s the national price level really didn't move that significantly. Now, the stock market was our preferred bubble at the time so that might have taken some of the speculative excess out of the real estate market.
-- Notice the huge price increase during this expansion. Compare that increase to the increase during the last expansion. In comparison it looks like the latest price increase is unhealthy.
-- Notice we're just turning the corner on the downward move.
In other words, we have a long way to go.