Reports of a housing rebound have been greatly exaggerated

Look out, below! The Twin Cities housing prices are in a nosedive. Again. The Case Shiller Index, which measures the resale values of homes, dropped another 1.9% in October from September, according to the report released this morning.

The drop wipes out all of the gains in prices the Minneapolis area made in 2010, most of which came in the late spring. Resale prices are down 1 percent on the year, and are down almost 3 percent from one year ago.

Housing rebound? It ain’t happening. We may not have reached bottom yet.

It could be worse; we could be Chicago, where prices have dropped 6.5% in the last year, the survey said. Of the 20 metropolitan areas surveyed, only Los Angeles (3.3%), San Diego (3.2%), San Francisco (2%), and Washington (3.7%) recorded an increase in housing prices from a year ago.

Click on the table below to see a bigger image.

case_oct_10.gif

More analysis here.

  • Very few American cities have seen real estate prices tumble like those in Flint, Michigan. Hundreds of homes are available at prices less than $10,000 in a market that has been devastated by de-industrialization. Here is a look at the issues facing the city of Flint and a few examples of very low-priced housing:

    http://viableopposition.blogspot.com/2010/12/flint-city-in-crisis.html

  • Andrew

    If you think the latest Case-Shiller Index is scary, check out the latest average of asking prices. HousingTracker dot net provides a weekly report for dozens of metropolitan areas. In the Twin Cities, the median asking price is a whopping 17% less than last year at this time.

  • GregS

    What is bad news for some, is good news for others. As the housing prices skyrocketed over the years, I kept wondering, “How will my kids afford a house?”

    Well, I guess now we know.

  • Joanna

    What this can remind us of: that real estate bubble was BIG. I bought my condo in 1994. Before the recession, I could have sold it for three times what I originally paid. Now I might be able to sell it for twice what I paid. Has it lost value? Depends on how you look at it. Interest rates are low. If I sold now, would I be able to afford to move into something comparable? That wasn’t possible a few years ago, but it might be now. Housing prices had heated up so much that housing was becoming unaffordable for working people. This is a “market correction,” as they say. I’m not saying it’s a good or a bad thing, just that it will affect various people differently depending on when they entered the market, etc.