May 12th, 2009
12:34 PM ET

Financial Dispatch: Home prices slide 14%

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/03/10/foreclosure-sign-getty.jpg]

Andrew Torgan
CNN Financial News Producer

The steep slide in home price accelerated at a record pace during the first three months of 2009.

The national median home price of single family homes sold during the first quarter fell 13.8% to $169,000 year over year, and 6.2% compared with the last quarter 2008, according to the National Association of Realtors. That was the largest year-over-year decline in the 30-year history of the report.

The NAR attributed much of the loss to two factors: First-time homebuyers, who are often entry-level buyers, accounted for about half of all purchases during the quarter. And many buyers took advantage of the deeply-discounted prices of foreclosed properties and short sales. These "distressed properties" typically sell for 20% less than traditional homes, according to NAR. These homes also accounted for about half of all transactions.

Trade Deficit widens

The U.S. trade deficit rose in March for the first time since last July as the global recession cut sharply into sales of American exports.

The Commerce Department says the deficit widened to $27.6 billion in March, slightly lower than the $29 billion gap that economists had forecast. The politically-sensitive trade deficit with China also increased.

Ford seeks to raise cash

Ford Motor says it will offer 300 million common shares in a public offering to help meet funding requirements for retirees' health benefits

Based on Monday’s closing stock price, the offering could raise nearly $2 billion dollars. The automaker says it will use part of the profits to pay into a health care trust for its retired workers under its agreement with the United Auto Workers union.

GM stock falls to 76-year low

General Motors stock plunged 23% to a 76-year low this morning, a day after a group of GM executives disclosed they had sold shares in the struggling automaker.

Six GM executives, led by former GM Vice Chairman and product chief Bob Lutz, disclosed Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker.

The sale underscores the pressure on GM with less than three weeks remaining for the automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.

750,000 jobs by August?

The Obama Administration estimates that the economic stimulus plan will create or save 750,000 jobs by early August, a senior administration official said Monday.

The comments came as the administration's Council on Economic Advisers released a report that explained the methodology behind its estimates for how many jobs will be created by the $787 billion stimulus package.

The report touts - as stated previously by the White House - that the plan will save or create 3.5 million jobs by the end of 2010. It also points to even bigger job creation and savings of 6.8 million jobs by the end of 2012.

Crude touches $60/barrel

Crude oil prices topped $60 a barrel level in electronic trading this morning as investors focused on signs of economic stabilization and a weaker U.S. dollar.

Oil last settled above $60 a barrel on Nov. 12, when it ended at $62.41.

Gas prices surge 10%

Gas prices have surged nearly 10% over the past two weeks.

That's a gain of 20 cents during the past 14 days, and the national average hit $2.248 a gallon on Tuesday, according to AAA.

There is a silver lining, however: Analysts say a return to $4 a gallon gas is not on the horizon. Even though prices have been on a tear, they’re still some 46% lower from the all-time high of $4.114 a gallon hit last July.

Memorial Day travel to rebound

Despite that recent run-up, Memorial Day travel is expected to rebound this year, thanks to the overall decline from 2008's record-high gas prices and discounts on hotels.

According to AAA, a total of 32.4 million Americans will travel at least 50 miles from home to mark the holiday weekend. That's an increase of 1.5% from last year, when soaring gas prices cut the number to 31.9 million.

Baggage fees top $1 billion

U.S. airlines took in a record $1.1 billion in bag fees in 2008 after staring to charge for all checked luggage in an effort to cover rising energy prices, according to data from the U.S. Transportation Department.

Traditionally, airlines would only charge a fee for passengers who exceeded the baggage weight limits or who would want to check more than 2 pieces of luggage. United Airlines was the first U.S. carrier to break with the practice by charging $25 for a second checked bag starting in February 2008. US Airways announced it would start charging $15 fee for the first bag starting July 2008.

Most carriers now follow this practice of charging $15 (each way) for the first checked bag and $25 (each way) for a second checked bag.

Filed under: 360° Radar • 360º Follow • Andrew Torgan • Economy • Finance • Gas Prices
soundoff (9 Responses)
  1. Annie Kate

    The only thing to fear is fear itself was in Franklin Delano Roosevelt's first inaugural address – not Teddy Roosevelt (he was the one with the big stick).

    I don't see much movement of houses in my area – the ones with For Sale signs have been for sale now for over a year. Several have cut their price several times. Still no buyers. The job market here is pretty bad too and seems to only get worse. On companies who off shore – some of those companies do not have their HQ in the US; they incorporated in places like Bermuda for the tax advantage but do the majority of their work in the US with what used to be US employees – now its employees from India. I would think a rule that said if the work was in the US the workers had to come from the US would be in order – it would certainly help protect the US worker.

    May 12, 2009 at 7:19 pm |
  2. Patty In Pa

    I am trying Earle.
    I know many people that have it much worse; I always keep that foremost in my mind. I now have been advocating for others in the same situation were in. I have written letters to Pres. Obama and actually spoke with his scheduler, but a week later was turned down for a meeting, the lack of focus and sense of urgency for those unemployed over year is disgraceful!
    We don’t get the 65% COBRA discount. We have paid over 16,000 for COBRA since my husband lost his job. That’s only for people unemployed since Sept 1, 2009! Who writes this legislation???
    Now Pres. Obama added 2nd liens into the Housing plan. So 2nd liens must modify if the first does or they can extinguished the loan. BUT the Gov will give 3 cents on the dollar to those over 180 days delinquent AND 8-12 cents on the dollar to those under 180 days delinquent!
    Once again the longer you said afloat and stayed responsible to survive, we are the forgotten people!
    Hey we don’t want the Gov to bail us out! WE just wanted JOBS!
    We are a tight family that has always given. I started a nonprofit for US Marines back in 2006 that has raised over $660,000.00 in products and donations that all went to the Marines, sailors or their families in need. I never took one cent for self benefit, to me that’s wrong, and against all my morals. With all that is going on in our life at this time I am still working on a homecoming for a battalion and building a Memorial for a battalion that has had 11 young warriors killed in Action. I am a survivor a person who known as tenacious when it comes to helping others. I break down all walls, normally, but this truly has taken its toll on all of us. Advocating for one’s self is much different than helping others that’s for sure.

    If the moderator allows I will post the website where you can see things we have pursued and also my Ireports.

    Moderator? May I post a link?

    Hugs to all and God Bless you and yours

    May 12, 2009 at 5:46 pm |
  3. earle,florida

    Re: Patti ,Never,ever give up hope,never,and never ever give up prayer,never,...

    May 12, 2009 at 4:49 pm |
  4. Patty In Pa

    You said “Hope trumps fear" We HAD Hope! If would be allowed I would post a link to my website here regarding all we have done right and responsibly. You may then understand the vast majority is not in the turn around your seeing. It’s a fraction of what needs to be done.
    First jobs back to USA! Big companies must be penalized if they have their HQ's in USA that needs to happen NOW! Enough already with tax breaks for the big guys!

    I held onto hope when my husband lost his job of 18 years back in Jan 2008. I am disabled we are in our both in our mid fifties, I held onto hope when we cashed in our 401K at 25% loss to stay responsible to our lenders and HOPEFULLY buy us time while the job searched continued.
    I held onto hope until we learned our credit score dropped from 750 to 515 the second month we couldn’t pay our mortgage. (That’s after using all our rainy day funds & 401K to hold on for dear life, which lasted us for 1 year!)

    I held onto hope when in Jan 2009 we received the “letter of intent to foreclose"!
    Ok so 16 months of educating ourselves on what to do to survive and staying HOPEFUL is going down the drain.
    Teddy Roosevelt said: The Only thing to fear is fear itself. I lived by that motto until the hell we have been living in this past 16 months. I say only thing to fear is when you’ve been responsible all your life and now you face losing everything! That’s very fearful!

    May 12, 2009 at 4:11 pm |
  5. Patty In Pa

    I have been doing Ireports on how false the numbers are regarding the latest unemployment numbers as well as existing home sales.
    People how have been so focused on numbers. Let's talk reality; many people have been unemployed since this recession officially began back in Dec 2007. Unemployment jumped in Jan 2008, those folks who still can’t find jobs for the life of them and believe me there is millions of people in that situation, have utilized all their unemployment benefits! That’s surely our case.
    We no longer are represented in the unemployment numbers or statics.
    Jobs created or saved? That is another joke unless you are physically able to build roads and bridges that we not shovel ready and go to nowhere! People are taking 10% or more pay cuts to hold onto their jobs, it wasn’t the stimulus money!
    Existing home sales are up? Sure they are people who want a new home of investors that have money are buying these homes pennies on the dollar. Foreclosed a home that is! Where is the focus to keep people in their homes? I get emails daily titled “Take advantage of the poor economic times” buy gorgeous homes for under 70,000! That sickens me!
    I am all for let’s be positive in our thoughts, but let’s be realistic ok?? Many more people will lose jobs and homes over the next year or more. That is the reality, but hey we the uneployed are under 9% of the population the minority, so to the other 91% all is looking up.

    Keep in mind anyone can become unemployed any day now.

    May 12, 2009 at 2:56 pm |
  6. Jim M

    There are several major problems with stories about the rise, and more recently the fall in housing values/prices.

    Location, Location & Type.

    You will find many areas of the country where property values are modestly increasing. Unfortunately, the good news is continuing to be overshadowed by markets where values doubled between 2005 and 2007. In some of these areas, the construction is less than ten years old and when the units were placed on the market, they were already over-valued by the builders.

    In some areas, e.g. parts of Florida, single family homes are increasing in value, while less than one-quarter mile away condo units are continuing their decline.

    In my opinion, the residential markets will take years to correct, due to: continued job loss; difficulty in securing mortgages; overbuilding – in certain areas; and, matching a willing buyer to a willing seller (everybody has a different reason for WANTINg or HAVING to move).

    May 12, 2009 at 2:23 pm |
  7. earle,florida

    Funny thing happened to me the other day when I went to the Home Depot to get some items. I decided to do alittle price checking. Guess what? Copper tubing,etc., pvc piping,plumbing,cabinets vanities, sinks,and various accesaries,copper sheathed wire,etc.,plywood,drywall,joint compound etc.,windows,interior/exterior doors,etc.,siding,paint,iighting fixtures,etc.,and so many other items. I'd figure deflation would have an adverse effect on,but it wasn't priced in. Rather the prices were all inflated as if the housing industry slump was non-existent. Perhaps the wages went down,I thought to myself for the home remodelers,and daily labor,but to my suprise it was where it was at the height of the housing debacle,so what gives? Needless to say,I left the store more confused than ever. Go figure,...?

    May 12, 2009 at 1:51 pm |
  8. Terry, TX

    1. Houses were overpriced anyway..and people got loans they couldn't afford.
    2. Trade Deficit Widens-when you don't manufacture...and thus import more than you export....(China)...duh...news flash.
    3. Ford raising cash...for the unions...needs to loose the unions and go back to making cars.
    4.GM stocks fall....loose the unions..go back to making cars
    5. 750,00 jobs by Aug...per the White House...Ha!..don't count the census
    6. Gas & Crude up...thank goodness energy is not in the tank...we need to drill and refine here ...consumer & national security...White House pay attention...no carbon taxes.
    7. Memorial Day..well the White House will ruin it with the release of pictures of detainees...just give the ACLU an office in the White House..they are apparently are running the place.
    8. Baggage...what do you think they are suppose to do with the Obama taxes coming down...you know tax small and big businesses and then hit them with a carbon tax. Duh!

    May 12, 2009 at 1:44 pm |
  9. Mari

    Well........ the nay sayers continue to spread bad news. I am a 'regular' person, who is watching my husband's company win new deals, our daughter's firm hire back laid off workers, and our neighbor's homes selling. Oh...... and our 401ks are rebounding!

    Hope trumps fear every time!

    May 12, 2009 at 1:21 pm |