Friday, September 19, 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

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    UC to create $250 million venture capital fund

    By San Francisco Chronicle | From Page: A1

     
    School district may redevelop downtown site

    By Jeff Hudson | From Page: A1

    Grant means new push for moving tracks out of town

    By Dave Ryan | From Page: A1 | Gallery

     
    Some say council needs to reconsider MRAP

    By Dave Ryan | From Page: A1

    Man faces arson charge in huge California wildfire

    By The Associated Press | From Page: A2

     
    DUI suspected in crash

    By Lauren Keene | From Page: A2

     
    Master Gardeners share their wisdom at free workshops

    By Enterprise staff | From Page: A2

    Scots vote to stay in UK

    By The Associated Press | From Page: A2

     
    France strikes Islamic State group’s depot in Iraq

    By The Associated Press | From Page: A2

    Project Linus seeks donations

    By Enterprise staff | From Page: A3

     
    Rabid bat found at Holmes Junior High

    By Enterprise staff | From Page: A3

    Students invited to apply for Blue & White grants

    By Enterprise staff | From Page: A3

     
    Halloween costume sale benefits preschool

    By Enterprise staff | From Page: A3

    Telling tales, on ‘Davisville’

    By Enterprise staff | From Page: A3

     
    Volunteers sought to make veggie bags

    By Enterprise staff | From Page: A3

    Storyteller will draw on music, dance

    By Enterprise staff | From Page: A3

     
    Woodland Healthcare offering flu shots

    By Enterprise staff | From Page: A3

     
    Putah Creek Bike Path to close temporarily

    By Enterprise staff | From Page: A3

    Little Free Libraries open at Montgomery

    By Anne Ternus-Bellamy | From Page: A3

     
    Nonprofits can get DCN’s help

    By Enterprise staff | From Page: A4

    Register to vote by Oct. 20

    By Enterprise staff | From Page: A4

     
    Free workout class set at library

    By Special to The Enterprise | From Page: A4

     
    Explorit: Lots of ways to be a volunteer

    By Lisa Justice | From Page: A4 | Gallery

    Sierra Club remembers longtime walker

    By Special to The Enterprise | From Page: A4

     
    DHS Classes of 1954 and 1955 will hold 60th reunion

    By Enterprise staff | From Page: A4

    Davis maps available at Chamber office

    By Enterprise staff | From Page: A5

     
    Need a new best friend?

    By Enterprise staff | From Page: A5 | Gallery

    Reception benefits endangered gorillas

    By Special to The Enterprise | From Page: A5

     
    Downtown history tour planned in October

    By Enterprise staff | From Page: A7

    Davis hosts its own climate change rally

    By Special to The Enterprise | From Page: A8

     
    Sutter Farmers Market offers local goods

    By Enterprise staff | From Page: A8 | Gallery

    Wolk applauds approval of stronger rules for olive oil

    By Special to The Enterprise | From Page: A8

     
    Qigong classes available for heart health

    By Enterprise staff | From Page: A9

    .

    Forum

    Sick of being the bad guy

    By Creators Syndicate | From Page: B5

     
    Project has safety risks

    By Letters to the Editor | From Page: A6

    Learn more about Paso Fino

    By Letters to the Editor | From Page: A6

     
    Educate homeless with dogs

    By Letters to the Editor | From Page: A6, 1 Comment

    Cheers and Jeers: Not the end of the rainbow

    By Our View | From Page: A6

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A6

    Return to previous plan

    By Letters to the Editor | From Page: A6

     
    Save the ‘pine cone place’

    By Letters to the Editor | From Page: A6

    Affirm our community values

    By Letters to the Editor | From Page: A6

     
    .

    Sports

    Devils hope the light bulb turns on at Edison

    By Enterprise staff | From Page: B1

     
    River Cats and Giants sign two-year deal

    By Enterprise staff | From Page: B1

    Blue Devil volleyballers hold off Herd

    By Spencer Ault | From Page: B1 | Gallery

     
    Aggies’ new energy could be scary for Big West

    By Bruce Gallaudet | From Page: B1

    No rest for the weary: Aggie TE Martindale busy on and off the field

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Mustangs are no match for DHS boys in water polo

    By Enterprise staff | From Page: B2

    Take Zona and Bama this week

    By Bob Dunning | From Page: B2

     
    A’s slide continues as Rangers sweep

    By The Associated Press | From Page: B8

    .

    Features

    Name Droppers: Awards keep coming for UC Davis retiree

    By Enterprise staff | From Page: A7

     
    .

    Business

    Redesigned 2015 Escalade remains breed all its own

    By Ann M. Job | From Page: B3 | Gallery

     
    .

    Obituaries

    Carol L. Walsh

    By Special to The Enterprise | From Page: A4

     
    .

    Comics

    Comics: Friday, September 19, 2014

    By Creator | From Page: A10

     
    .

    Real Estate Review

    Featured Listing

    By Zack Snow | From Page: RER1

    Professional Services Directory

    By Zack Snow | From Page: RER2

    Taylor Morrison

    By Zack Snow | From Page: RER3

    Malek Baroody

    By Zack Snow | From Page: RER4

    Norcal Land

    By Zack Snow | From Page: RER5

    Robin Garland

    By Zack Snow | From Page: RER6

    Karen Waggoner

    By Zack Snow | From Page: RER7

    Dana Hawkins

    By Zack Snow | From Page: RER7

    Martha Bernauer

    By Zack Snow | From Page: RER8

    Joe Kaplan

    By Zack Snow | From Page: RER8

    Lynne Wegner

    By Zack Snow | From Page: RER8

    Remax

    By Zack Snow | From Page: RER9

    Melrina A Maggiora

    By Zack Snow | From Page: RER10

    Wells Fargo Home Mortgage

    By Zack Snow | From Page: RER11

    Julie Leonard

    By Zack Snow | From Page: RER11

    Coldwell Banker

    By Zack Snow | From Page: RER12

    Kim Eichorn

    By Zack Snow | From Page: RER14

    Lyon Real Estate

    By Zack Snow | From Page: RER15

    Jamie Madison & Associates

    By Zack Snow | From Page: RER16

    Marcelo Campos

    By Zack Snow | From Page: RER16

    Julie Partain

    By Zack Snow | From Page: RER16

    Bob Bockwinkel

    By Zack Snow | From Page: RER17

    Juan Ramirez

    By Zack Snow | From Page: RER17

    Kim Merrel Lamb

    By Zack Snow | From Page: RER17

    Chris Snow

    By Zack Snow | From Page: RER18

    James Hanna

    By Zack Snow | From Page: RER18

    Raul Zamora

    By Zack Snow | From Page: RER19

    Susan von Geldern

    By Zack Snow | From Page: RER19

    Travis Credit Union

    By Zack Snow | From Page: RER20

    Karen Waggoner

    By Zack Snow | From Page: RER21

    Jamie Madison

    By Zack Snow | From Page: RER21

    Tracy Harris

    By Zack Snow | From Page: RER22

    Lisa Haass

    By Zack Snow | From Page: RER22

    First Street Real Estate

    By Zack Snow | From Page: RER24