American house prices are suffering their biggest slump in more than 20 years as recession looms
After news of the online US shopping boom, casting a small ray of light into the gathering economic darkening, it's back to normal.
The latest American home price stats were out this week. We've got used to pouring a stiff drink before viewing these, but this time...best to be easy on the water.
House prices are now showing the biggest slump in more than 20 years as falls accelerated in the third quarter. And sales continued to crumble.
US domestic property values lost 1.7% in the three months to the end of September, according to the well respected S&P/Case-Shiller index, in the worst decline since the series started in 1987.
Home prices have been dropping in 10 major US cities since May 2006, records the index, and in September were 4.5% down on the year before. Tampa suffered worst with an 11% annual slide while Miami, Detroit and San Diego all shed some 10%.
October saw new home sales plummeting by 20% compared with last year and single-family home prices plunging 5.1%, the largest drop on record according to the National Association of Realtors, as well as the lowest sales level since 1999 for previously owned American homes.
House constructors have suffered big losses and been forced to slash jobs. Over the last three months, single family housing starts have decreased at an annualised rate of more than 50%. Last week the nation's second biggest builder DR Horton revealed its worst annual results in ten years.
Is a market recovery on the horizon?
No, says the latest survey by the National Association of Homebuilders, with homebuilding sector confidence at its lowest since records began in 1985.
And the level of housing futures contracts - derivative instruments traded on the Chicago Mercantile Exchange that allow investors to take views on movements in property values - indicates that house prices are expected to fall by a further 10% by November 2010.
It's hard to disagree.
Discounting by house builders has combined with rising repossessions in supplying more cheap properties that buyers can absorb. The backlash from sub-prime has resulted in tougher lending criteria and fewer mortgages.
Which means the downward spiral continues.
Other barometers are also warning of more bad weather ahead.
American consumer confidence plunged in November to almost its lowest level since 1992, with the temporary exception of immediately post-Hurricane Katrina in October 2005.
US commercial property is turning down, with the seven year bull run ending in September when prices fell 1.2%. The cost of credit default swap insurance, which investors buy for protection against loan delinquencies, has more than doubled in the last month, indicating more trouble ahead.
Even macho off-roaders are feeling the pain. Recreational vehicle makers are hitting a rough patch, says a University of Michegan industry monitor which has just swung to forecasting a 4.8% decline in 2008 sales, having in June expected a 3.5% rise.
Despite online shoppers flexing the plastic and keeping retailers busy for a few more weeks, a lot of belts look like being tightened in 2008.
With most economic downturns preceded by housing market falls, and consumer spending still accounting for over two-thirds of the US economy, it's hard to see the States avoiding a very nasty recession.
