Home prices plunging even faster

According to the S&P/Case-Shiller national home price index, the home price decline is still accelerating:

The home price slide accelerated during the first three months of 2009, according to a report issued Tuesday.

The S&P/Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008. That followed an 18.2% drop last quarter. ...

The ugly report was somewhat unexpected, according to Mike Larson, a real estate analyst for Weiss Research.

"The market was anticipating better results," he said. "There had been some signs of increased sales in post-bubble markets."

But that sales increase has not translated into higher prices. Bargain hunting — bottom fishing really — for foreclosures and other distressed properties has driven sales volume up while further depressing prices.

The foreclosure sales, which many appraisers used to ignore when they evaluated home prices because they represented outliers rather than typical sales, now have to be accounted for.

"These used to be anomalies," said Larson. "Now, when sales are dominated by foreclosures, where they represent 50% or more of [transactions], they are the market."

It is amazing that pundits are expecting that a bottom is right around the corner when price declines are falling at a 19% annual rate. House price declines rarely turn on a dime. In fact, I doubt it has ever happened in recorded history anywhere in the world. You should expect the rate of decline to start slowing at about the half-way point, but right now price declines are still accelerating.

Pundits have been consistently claiming that a bottom was right around the corner ever since late 2005. Go back and check Ben Bernanke's statements. He first claimed the market was about to hit bottom two or three years ago.