TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

House Prices keep Declining The Case-Shiller Index of the housing industry showed a 19% year-over-year decline. The Case-Shiller report shows many regions have revisited 2002 prices. Some geographic areas are seeing prices going back to those in the year 2000.Real estate, on average, has declined by 32% from its second quarter 2006 highs. Some areas like Las Vegas and Phoenix, according to Case-Shiller, are off more than 50%!

14% Decline in Home Prices! The National Association of Realtors reported median home prices fell 14% year over year. This is a cumulative 26% decline from the peak in the third quarter of 2005. It has been nearly three-and-a-half years since the 2005 peak in prices. Are we finally close to a bottom in price declines?

The Case-Shiller Home Price Index came out today, and it showed that home prices fell 15.4% in the second quarter nationwide, and this just puts more pressure on anyone falling behind in mortgage payments. A homeowner that has a loan worth more than their mortgage often finds it easier to just walk away from a home rather than sell it, so until we can see some price stabilization, the glut of homes on the market is likely to grow. Keep in mind that a lot of the adjustable loans are still set to adjust, so again, the pressure on prices will likely continue. Note: Commercial Building prices seem much steadier. The problem I observe is not the Sales price being too low, but the Listing price of many properties being above market value.