Gas Prices Up, Home Prices Down
Wasn’t it Al Gore who once said, everything that should be up is down, and everything that should be down is up? That pretty much sums up the economic news these days.
Experts expect prices to jump 10 to 20 cents over the next few weeks before spiking in mid-May at around a record-breaking $4.25 a gallon.
It could actually go much higher, some experts suggesting $5 a gallon isn’t out of the question.
And just to add insult to injury, home prices are now the lowest they’ve been in 10 years… meaning they’re lower now than they were during the much-demonized Bush Administration.
The housing market started off the new year with a thud. Home prices dropped for the fifth consecutive month in January, reaching their lowest point since the end of 2002.
The average home sold in that month lost 0.8% of its value, compared with a month earlier, and prices were down 3.8% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets.
Home prices have fallen a whopping 34.4% from the peak set in July, 2006.
One of the big problems is confidence.
Potential homebuyers lack confidence in the market, according to Michael Feder, CEO of Radar Logic, an analytics company that produces daily spot prices for real estate. A big problem looming is a massive number of potential foreclosures.
“Potential buyers see that there are millions of homes underwater, and at elevated risk of foreclosure, and conclude that housing values are unlikely to appreciate in any meaningful way for many years,” he said.
With the Obama economy not giving businesses any reason to hire, and lots of reasons not to hire (coughOBAMACAREcough), a lot of potential buyers also just don’t have the money to buy a house.
The old political adage is that people vote their wallets… news like the two stories above should make Democrats very nervous about November.