Marketwatch, 1/27/09

 

Home values in 20 major U.S. cities fell a record 18.2% in the 12 months ending in November, Standard & Poor's reported Tuesday. That report follows one Monday showing that sales of existing homes rose 6.5% in December.

 

Neither report suggests any real sign of a bottom in the housing crash. In the well-worn phrase: This is not the end. It's not even the beginning of the end.

Actually, it's not even the end of the beginning.

 

Nearly 45% of the sales reported by the National Association of Realtors Monday were "distress" related, suggesting that only now are the first rounds of foreclosed homes reaching prices marked down enough to attract interest.

 

And Monday's blizzard of more than 70,000 pink slips clearly represents an ominous intensification of economic woes.

 

Still, even though getting to the point when a recovery process can begin will be a very long process, there are a few glimmers of hope on which to cling.

 

For one thing, the moribund market for housing still is functioning somehow. And it is slowly starting to whittle away at the edges of the inventory.

 

For another, lower interest rates are available to help that process along -- for those who qualify and can actually get the bank to release the funds.

 

And finally, double-digit price declines, while admittedly painful, are nevertheless the fastest route to a bottom. As Patsy Cline might have sung it, with real estate as with love it's best to "Hurt me now, get it over."