According to the study, the shifts among the top five states have continued this month with Nevada (-26.1%) remaining the top-ranked state for annual price depreciation, but Florida (-23.2%) supplanted California and became the second-ranked state for price depreciation. After being the top-ranked state for 20 consecutive months — May 2007 through December 2008 — California’s (-22.7%) home price declines have improved sharply, putting California into third place in April 2009 and just ahead of fourth-ranked Arizona (-20.5%).
The rapid deterioration of home prices in Illinois (-17.4%) put that state in fifth place for the first time during the downturn, indicating that woes in the nation’s real estate market may be shifting to other areas.
When you read the above then think about the comment about home price declines “improving” Alice in wonderland through the looking glass comes to mind. The statement of the obvious is, home price in those areas had already taken a substantial decline a year earlier so actuality the numbers are much uglier if you live in one of those areas. The above information illustrates my point about unemployment and the wave of foreclosures coming. If you have watched the news, they have touted sales increases in many of theses areas driven by first time buyers (good sales) and investors (short term holding, they think). When you look at the phoenix area with 45,000 homes in the foreclosure pipe line (which was a year sales at peak) and unemployment not close to peak yet. How long before investor fatigue sets in when the value of what they have bought no longer looks like the “steal” they thought it was and they stop buying. The tax credit expires in December just when the second wave of foreclosures will start to come on the market. Ask yourself who will buy those homes besides the lenders who took them back.
Oh by the way I am glad I live in Billings MT where people were more conservative so the above issues have nominal impact on us. Although I know at times it does not feel that way.