Case-Shiller's index of 20 major metropolitan areas fell 18.5%, also a record.
"The broad downturn in the residential real estate market continues," said David Blitzer, chairman of the Index Committee at Standard & Poor's, in a statement. "There are very few, if any, pockets of turnaround that one can see in the data."
All 20 metro areas in the 20-city index recorded declines, with home prices falling more than 20% in eight of those cities. National home prices have dropped 26.7% since they peaked during the second quarter of 2006.
The decline does not seem to be slowing – just the opposite. The average home price dropped 2.52% between November and December in the 20 top metro areas. That was a larger increase than the 2.25% drop a month earlier." CNN.com
Ironically, the real estate market in Washington seems the least affected by all this. We sit near the trough.
I wish to propose here an economic question for which I will, at least rhetorically, not admit of having an answer of my own.
Whether for crass political reasons or for genuine difference of opinion, the two American political parties are projecting diametrically opposed views of the nature of the present economic crisis and its probable outcome.
The Democrats state that the present depressed state of the economy is different both in quality and depth from any recession that we have seen since WW2. They seem to believe that, if left to its fate, the economy of the United States and therefore probably of the world will spiral downward into a dark abyss from which it might well not climb for a long, long time. In that pit would be; very high unemployment rates, deflation, low levels of investment, etc., We have not seen doctors and lawyers paid for their services with baskets of eggs and dead chickens for a long time, but that seems to be what the Democrats seem to think possible.
On the other hand the Republicans seem to think, or at least to say, that what is going on is really just the trough inherent in an exceptionally deep business cycle. They seem to believe that if left alone the economy will "right" itself like a swamped boat, shrug off the water and rise to the surface. Having that view, they say that all the money being appropriated and disbursed for "recovery" is just unnecessary and a surreptitious means to enactment of the Democrats' desired socialist re-structuring of the United States. The belief in the "business cycle" theory of the crisis appears to be largely ideological, but subject to test by events, but the "socialist conspiracy" theory is, to some extent, supported by some of the items that the House Democrats chose to fund under the "stimulus" bill. The Democrats would argue of course that all expenditures are stimulative.
I am curious to hear the arguments on both sides. pl
PS Watch your language.