Friday, October 24, 2014
YOLO COUNTY NEWS
99 CENTS

Home prices stumble badly

By
May 10, 2011 |

The issue: We can only hope that once people find jobs, they’ll want to buy a house

Unemployment is typically the last economic indicator to recover from a recession, but even at 9 percent the jobless rate is positively brisk compared to another badly lagging sector of the economy — housing.

THE RATE OF DECLINE in home prices had been improving since it seemed to have bottomed out in 2009. But that upswing has come to an abrupt end. The real estate research firm Zillow says home prices dropped 3 percent in the first quarter of this year and fell 8.2 percent year-over-year. Prices have fallen for 57 straight months, according to Zillow, and 28.4 percent of homeowners are underwater on their mortgages, meaning they owe more than their house is worth.

Economists who had forecast the housing market would bottom out this year are now saying it will be sometime in 2012.

Acting as a drag on any recovery is the vast number of foreclosed homes selling — when they sell — at huge discounts. Fannie Mae and Freddie Mac sold 94,000 foreclosed homes in the first quarter but the mortgage giants have an inventory of 218,000 homes, up 33 percent from a year ago.

And all of this is getting expensive. Bailing out Fannie Mae and Freddie Mac from defaulted mortgages has cost $259 billion and Fannie Mae has just asked the government for another $8.5 billion.

THERE IS NOT much the government can do except wince and write the checks until the market stabilizes and lenders recover their confidence. Mortgage rates are really low — if you can get one. Lenders who were burned by their overconfidence during the boom are now, according to anecdotal evidence, too cautious about making loans, even to buyers who meet all the usual standards of credit worthiness.

What the government should not do is act to artificially re-inflate the housing bubble. The $9,000 homebuyer’s tax credit that expired last year bought a reprieve in the slide in home prices but it was both temporary and expensive.

It’s hard to disagree with the assessment of Wall Street Journal columnist Brent Arends:

“What a foolish boondoggle those tax breaks for home buyers have turned out to be. The government spent an estimated $22 billion between 2008 and 2010 on tax breaks to prop up the housing market. All it achieved was a brief suckers’ rally that ended last summer.”

WE CAN ONLY hope that once the unemployed find jobs they’ll want to buy a house. There are plenty available.

Comments

comments

.

News

 
A-Z: Downtown Davis is the place to celebrate

By Kimberly Yarris | From Page: C1

Courageous Thompson tapped for cycling shrine

By Bruce Gallaudet | From Page: A1 | Gallery

 
UC researchers: How low-water can our landscapes go?

By Katie F. Hetrick | From Page: A1 | Gallery

 
Downtown menu: coffee, boba tea, dessert

By Wendy Weitzel | From Page: C3

Can you give them a home?

By Enterprise staff | From Page: A3 | Gallery

 
Scientists work to save endangered desert mammal

By Kat Kerlin | From Page: A3 | Gallery

Host families needed for students and teachers from Mexico

By Special to The Enterprise | From Page: A3

 
Halloween Dance set Friday for teens

By Enterprise staff | From Page: A3

Yoga and chanting workshop planned

By Enterprise staff | From Page: A3

 
Day of the Dead folk art class set

By Enterprise staff | From Page: A4

Flea Market planned Sunday

By Enterprise staff | From Page: A4

 
Red-hot tunes set at Blues Harvest

By Enterprise staff | From Page: A4

Enjoy A Taste of Capay at historic ranch

By Enterprise staff | From Page: A4

 
Learn how to fill a cornucopia with flowers

By Enterprise staff | From Page: A4

‘Homeopathy at Home’ program planned

By Enterprise staff | From Page: A4

 
Video highlights Props. 1 and 2

By Special to The Enterprise | From Page: A4

Meet Poppenga at dog park Sunday

By Enterprise staff | From Page: A4

 
Celebrate origami at Davis library

By Enterprise staff | From Page: A4

Garden sale and open house features water-wise demos

By Special to The Enterprise | From Page: C4

 
Bay Bridge art project needs $4 million to keep shining

By San Francisco Chronicle | From Page: A5 | Gallery

Weir honored, a year early

By Enterprise staff | From Page: A5

 
Americans, internationals make connections

By Enterprise staff | From Page: A6

Explorit: Poison-proof your home with free lecture

By Lisa Justice | From Page: A6

 
For a good cause

By Fred Gladdis | From Page: A6

School board hopefuls discuss homework policy

By Jeff Hudson | From Page: A7

 
Sutter auxiliary seeks volunteers

By Special to The Enterprise | From Page: A7

Walkers welcome to join Sierra Club outings

By Enterprise staff | From Page: A9

 
Project Linus seeks donations

By Enterprise staff | From Page: A9

.

Forum

More theories on the abstention

By Letters to the Editor | From Page: A10

 
Rights beget responsibilities

By Letters to the Editor | From Page: A10

Water returns to its source

By Letters to the Editor | From Page: A10

 
A solution to the drought

By Letters to the Editor | From Page: A10

Experience nature’s treasures

By Letters to the Editor | From Page: A10

 
Subs have other concerns

By Letters to the Editor | From Page: A10

 
Tom Meyer cartoon

By Debbie Davis | From Page: A10

What’s next with Ebola?

By Letters to the Editor | From Page: A10

 
.

Sports

Bump, set, playoffs: Blue Devil girls clinch spot in postseason

By Thomas Oide | From Page: B1 | Gallery

 
Aggies expect a bonny meeting in Sacramento

By Bruce Gallaudet | From Page: B1

DHS footballers take on Pleasant Grove

By Enterprise staff | From Page: B1

 
Bye No. 2 comes at perfect time for nicked up UCD

By Bruce Gallaudet | From Page: B1 | Gallery

Shhh. Are Aggie women BWC’s best-kept secret?

By Bruce Gallaudet | From Page: B1

 
UCD roundup: Preseason awards roll in for Aggie hoopster Hawkins

By Enterprise staff | From Page: B2 | Gallery

Sharks suffer from road woes

By The Associated Press | From Page: B12

 
.

Features

.

Arts

‘St. Vincent:’ Quite a character

By Derrick Bang | From Page: A11 | Gallery

 
Rumpledethumps to play at Village Homes Performers’ Circle

By Enterprise staff | From Page: A11 | Gallery

DMTC plans ‘My Fair Lady’

By Special to The Enterprise | From Page: A11

 
Czech Philharmonic Orchestra to perform

By Enterprise staff | From Page: A11

Calling all artists for upcoming show

By Enterprise staff | From Page: A11

 
.

Business

.

Obituaries

Lewis Melvin Dudman

By Special to The Enterprise | From Page: A4

 
Ann Foley Scheuring

By Special to The Enterprise | From Page: A4

.

Comics

Comics: Friday, October 24, 2014

By Creator | From Page: B3