The Carroll Standard

House Prices Plummet Everywhere Except Detroit, DC

Tim Cavanaugh | Reason Magazine:

Americans who have withdrawn from the real estate market while waiting for prices to drop were rewarded again in 2011, as the Case-Shiller home price index decreased between 1.1 percent and 1.2 percent across the index’s 10- and 20-City Composites. House prices have now been falling for half a decade. 

Note how Standard & Poor’s report [pdf] uses pro-inflationary language to describe the decline in prices: "Miami saw no change in annual returns in October; while Atlanta, Detroit, Las Vegas, Los Angeles and Minneapolis saw their annual rates worsen," S&P writes [italics added]. 

Only Detroit, MI and Washington, DC posted increases in house prices this year, as seen in the chart to the right by Bill McBride of the Calculated Risk blog, which I recommend today and all days. I think the headline "House Prices fall to new post-bubble lows in October" leads the witness, however: Why should the 2006 bubble be a benchmark at all? Is there some reason to believe major-market prices, which were high relative to average annual salary in 2002 and 1999 and even 1991, were not hyperinflated in the last decade?