Overall growth in Johnson County has slowed to a trickle, a level not seen for 16 years, new numbers released by the county clerk’s office show. ...Okay, so now's probably not the best time to buy in sober markets. But Dennis takes care of himself, so he's going to live for a long time. He should focus on the long-term! S&P/Case-Shiller data today shows continued double-digit percentage declines in home valuations. I'll take a marginal increase over this:
Real estate valuation increased 2.36 percent compared with an increase of 7.12 percent a year ago. ...
Reappraisal growth for existing homes stood at 0.74 percent in Johnson County, a significant dip from the 10.64 percent home-value increase posted eight years ago, just before the Sept. 11, 2001, terrorist attacks.
Both the 10-City and 20-City Composites have been in year-over-year decline for 20 consecutive months. Of the 20 regions, 13 of them had their annual returns worsen from last month's report. As seen throughout 2008, the Sun Belt markets are being hit the most. Phoenix and Las Vegas are both reporting annual declines in excess of 30%, and Miami, San Francisco, Los Angeles and San Diego are all in excess of 25%."Housing doesn't create additional real value over time like other investments do. Without a rapid increase (or decrease) in both human capital and population, housing valuations shouldn't see double-digit year-over-year increases (or decreases). If they do, they're not reflecting an underlying reality, only the illusion of an increase (or decrease) in real value.
Nine of the 20 regions have record annual declines. Phoenix and Las Vegas are now returning -30.7% and -30.6% versus August 2007, respectively. Each of the California markets -- Los Angeles, San Francisco, and San Diego -- are down more than 25% from their values 12 months ago. Miami and Tampa, the two Florida markets, are down 28.1% and 18.1%, respectively.
When people presume the illusory increases in value are real, they end up spending money they don't have. Loans from the future have to be paid back. Taking them out is going to inflict pain, especially when so many of those who took them assumed they were getting stipends, not taking out loans. And it's not just homeowners who plunge into the red as a result--state and local governments do as well, as property tax revenues drop in tandem with housing valuations.
Steve Sailer has recently written about this on multiple occasions. His parsimony in the face of illusory gains served him well. Fortunately for most of the people in my neck of the woods, there were never any wild illusory gains to begin with, so we were financially responsible by default. Consequently, fewer than 1 in 1,000 homes in JoCo are being foreclosed on (and the stodgy upper Great Plains states have fared even better), compared to more than 1 for every 200 homes in California. Score one for Jack Cashill over Thomas Frank.