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Home prices plunge almost 20%
accelerated during the first three months of 2009, according to a report issued Tuesday.
The S&P Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008. That followed an 18.2% drop last quarter.
The Case-Shiller 20-city index dropped 18.7% year-over-year, also a record. It fell 18.5% during the last three months of 2008. This index has plummeted 32.2% from its July 2006 peak and has fallen 32 straight months.
The national index covers almost all homes sold throughout the United States and is reported quarterly while the 20-city index reports sales in 20 major metro areas and represents a cross section of the national market. The 20-city index comes out every month.
“Declines in residential real estate continued at a steady pace into March,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s in a prepared statement. “All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines.”

Unreal..how can it fall 18.5% last year, so you lost almost 20% of your home value, and then fall ANOTHER 20% to start this year? So if your home was worth $100, it was then worth $73.50 during the free fall, and now it is worth $58.80??

How can you refinance? There is no equity left, completely wiped out 10 years worth of “your home value will go up 5-8% a year”…

The loss of real estate value is breathtaking when you consider all the loans and equity people took out of their homes for other purposes…it will be a domino effect of massive loan losses at banks.

As you know I am a bear, I am scared now. I think we will retest and break through the lows of the last stock market dive. No one knows for sure, we can only make educated guesses and see what happens…

1. There isn’t enough printed money in the world to cover all the debt being issued for bailouts…ie. We don’t have enough money to pay for this mess on the planet now
2. There has never been a recession that you can just spend your way out of and take on huge debt..this is just what the US consumer did to get to this point, now the government, which is a representation of us, is doing the same.
3. Printing money at these levels will eventually lead massive dilution of the dollar. This will either cause the dollar to become a laughing stock of a currency and/or no longer the safe haven for the world
4. Our debt becomes less appealing with each passing day the printing presses work overtime
5. Real estate has yet to find a bottom (see above)
6. Commercial real estate is the next big problems for banks, followed by consumer loans such as credit cards and car loans.
7. Prime mortgages are starting to default at a staggering pace (see recent WSJ article), these are people with good credit and normal loans.
8. Unemployment, no matter who’s number you believe is, is going up from its already high numbers…see “mass layoffs” article by Tyler Durden
9. Corporate earnings are going to get squashed with a shrinking consumer, making this rally technically unsustainable.
10. North Korea is getting ready to start a Pacific Rim war, not great for news for the emerging markets as well as Japan.

Just my two cents, Dow 6500 in the next 6 months….