Realty Bites

That was the lead headline that came across my desk today in National Realty News. Here’s an excerpt:

Data through February 2008, released by Standard & Poor’s for its Shiller Home Price Indices, the leading measure of U.S. home prices, show declines in the prices of existing single family homes across the United States worsened in the second month of the new year, with 17 of the 20 now reporting MSAs [Metropolitan Statistical Areas] posting record low annual declines, 10 of which are in double-digits.

Both of the composite indices are now reporting annual declines in excess of 12.5%. The 10-City Composite posted a new record low annual decline of 13.6%, and the 20-City Composite recorded an annual decline of 12.7%.

“There is no sign of a bottom in the numbers,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Prices of single family homes continue to drop across the nation. All 20 metro areas were in the red for the February-over-January reading. In addition, 19 of the 20 MSAs are still reporting negative annual returns. The monthly data show that every one of the MSAs has now declined every month since September 2007, marking six consecutive months. On top of that, remained steep w the declines have with eight of the 20 MSAs and both composites reporting their single largest monthly decline in February.”

Good news or bad? Stupid question, right? Of course it’s bad news. Well, maybe not, if you read my entry on the Home Price Hype Cycle. In fact, this is just the headline we’re waiting for to signal we are nearing the bottom. Granted, National Realty News is not The New York Times. But keep your eyes open. When a respected, mainstream news organization like the Times publishes that headline, it’s time to breathe a sigh of relief. It’s the first sign that prices are close to bottoming out.

Incidentally, the Times published a headline above the fold in the Mutual Fund Report section on April 6 that read “Almost as if the Sky Were Falling.” Have you noticed that, after a brief dip, the stock market has gone straight up since then? Careful, though. They did say “almost.”