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Kai Ryssdal: Every month Standard and Poor’s releases something called the Case-Schiller Home Price Index and every month for the past year and a half or so, it has shown a pretty steep decline in home prices. Today, well the same thing. Even as everyone keeps on expecting some kind of a bottom. Tamara Keith reports that could be a while.
TAMARA KEITH: Decline in home prices is slowing down, slightly. As one economist put it, instead of falling off a cliff, now they’re just rolling down a very steep hill. Maureen Maitland is a vice president at Standard and Poor’s.
MAUREEN MAITLAND: There really aren’t many regions that are going unscathed. Some are down tremendously, some are horribly affected. Others are mildly affected, but it seems like almost every market is in fact affected.
Basically, all those steady home-value gains in the last five years or so, on average, nationally they’re gone.
MAITLAND: Home prices are back down to their late 2002 levels. That basically means we’ve lost all of the increases that went on between 2002 and 2006.
PETER MORICI: The decline in home prices is not over.
So this isn’t the bottom, says Peter Morici. The University of Maryland business professor says foreclosures are going to continue. Job losses will make the problem worse. That’ll make it tough for home prices to bottom out or increase.
MORICI: Defaults are going to hit all elements of the housing market. The prime borrowers, sub-prime borrowers, people with alt-As and in between. And going forward the go go days are over.
Even once home sales turn around, Morici says we’re not going to be able to bank on big gains in home values like we did just a few years ago. Something other than housing is going to have to pull us out of this recession.
In Washington, I’m Tamara Keith for Marketplace.
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