home prices home sales price index home builders

Home prices, sales, and starts keep falling
recession bar jobs banker bonuses

Both foreclosures and bar jobs plus bank profits rise

Funny how bankers can worsen a recession but also escape it. We trim, blend, and append seven 2011 articles from: (1) MarketWatch, Jan. 25, on C-S prices by Greg Robb; (2) USA Today, Jan 12, on Zillo prices by Julie Schmit; (3) AP, Jan 26, on home sales by Martin Crutsinger; (4) AP, Jan 19, on home starts by Martin Crutsinger; (5) Reuters, Jan 13, on foreclosures by Corbett B. Daly; (6) USA Today, Jan 10, on jobs by Paul Davidson; and (7) BBC, Jan 14, on Morgan.

by Robb, by Schmit, by Crutsinger, by Daly, by Davidson, and by BBC

Home prices fell 1% in November from October in 20 major US cities, according to the Case-Shiller home-price index. It marked the fourth straight monthly decline for prices.

Home prices fell in November in 19 of 20 major cities measured by the Standard & Poor's/Case-Shiller index, and nine of those cities fell to their lowest point since the housing bust.

Prices have fallen 1.6% in the past year, marking the second consecutive decline.

In a separate report on home prices, the Federal Housing Finance Agency said prices in November were down 4.3% compared with a year earlier. The data are based on purchase prices of homes with mortgages backed by Fannie Mae or Freddie Mac.

In the seven years leading up to the peak in 2006 July, the non-seasonally-adjusted national 20-city home-price index jumped by 155%. So far, this index has dropped by 30% in the 53 months since the peak.

JJS: Different stats come from a different data but show the same trend.

Market researcher Zillow, which doesn't include foreclosure sales in its data, says home prices fell 5.1% in November from a year earlier. November marked the 53rd- consecutive month of declining home values. Prices reset to levels last seen in 2003 October.

Single-family home prices declined for the fourth month in a row and at a faster pace. They dropped 3.4% in October year-over-year.

In general, states seeing rising prices didn't experience the real estate boom to the extent that other states did, and so they aren't feeling the bust as much.

JJS: Prices are down but not enough for many people.

Buyers purchased the fewest number of new homes last year on records going back 47 years.

Sales for all of 2010 totaled 321,000, a drop of 14.4% from the 375,000 homes sold in 2009. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years.

In December, a home newly built commanded a higher median price of $241,500, up from a November median of $215,500. For all of 2010, the median sales price was $221,900, up 2.4% from the 2009.

JJS: Perhaps that price is up because the supply is down.

US homebuilders are coming off their two slowest years in more than a half-century. Homebuilders broke ground on 587,600 homes in 2010 and 554,000 in 2009. When housing is hot, homebuilders break ground on more than 1.5 million units a year.

Construction projects normally spur more hiring and help lead economies out of recession. This time markets are flooded with unsold homes -- many of them foreclosures that are forcing prices closer to what buyers can afford.

JJS: Never mind buy a new one, millions canít keep their old one.

Banks seized more than a million homes in one year for the first time last year, despite a slowdown in the last few months, topping the prior record of 918,000 homes seized in 2009.

The number of foreclosure filings, which includes default notices, auctions, and repossessions, was a record 2.9 million last year.

In 2005, before the housing bust, banks took over just about 100,000 houses.

JJS: While some go drown their sorrow, others celebrate having more pocket money leftover after spending less on housing.

Robust hiring by bars and restaurants may be a sign of better days. The food services industry added 25,000 jobs last month and was the biggest contributor to a 47,000 jump in employment for leisure and hospitality -- the top job creator among 14 broad sectors the government tracks. All US employers added 103,000 jobs last month.

Restaurants and other food and drinking places were among the biggest job producers of 2010, adding 188,000 positions. Hiring picked up sharply in the second half of 2010, with food and drinking establishments adding 130,000 jobs since August.

Restaurant revenue closely tracks consumer spending and job growth. Consumer spending was up 4% in the fourth quarter. Many restaurant jobs don't require a college degree. Fifty-eight percent of restaurant employees had only high school diplomas in 2008.

JJS: While finances might be a worry for many, itís not for bankers.

JP Morgan Chase reported profit in the last three months of 2010 of $4.8bn (£3bn), marking a rise of 47% on a year earlier. Revenue increased 6% to $26.7bn. For the full-year, the bank made a record profit of $17.4bn.

Pay and bonuses for employees in its investment bank more than trebled year-on-year to $1.8bn in the final three months.

The bank made no mention in its results statement of whether it would raise its dividend to shareholders. It had slashed its dividend from $1.52 a share before the financial crisis to 20 cents per share now.

JP Morgan is the only major Wall Street firm to have made profits in every quarter, even in the recession.

JJS: So, how do we lift up all boats, not just those of bankers? How? Donít let land be bought and sold but just ďrented and leasedĒ. Well, not exactly. But we would do things like levy land dues and pay ourselves a Citizensí Dividend so that land values would benefit everyone and not just speculators and lenders. In this geonomic program, homeowners would get back more by sharing all the land value in their region than by selling their home plus land.

But to share Earthís worth, first these ground rents must be collected. If geonomics makes sense to you, the US newspaper of record, the New York Times, offers readers an opportunity to comment on articles about economic issues and recommend comments left by other geonomists: click here


Editor Jeffery J. Smith runs the Forum on Geonomics.

Also see:

World's rich got richer, so how about a break?

Home builders' index & Jobs numbers Both down

Revised formula puts 1 in 6 Americans in poverty as ...

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