US record drop of home prices by Barbora Misakova

From time to time I think how great it would be if I had my own flat or a house. I dream about the big windows with colorful hangings, big terrace or balcony where I could every sunny morning have my breakfast. I can clearly see my bedroom and kitchen; the living room will be very spacious and bright with a big and comfortable sofa and rocking chair near the big window. Garden would be simple just a nice green grass and few fruit trees, near the entrance would be hammock where we could sit during the hot summer nights. After this dreaming the reality comes! How such a poor student like me could affords such a comfort? Two young people with good jobs can hardly buy or rent more than 2-rooms flat. It looks that situation in US is quite similar especially nowadays. American cities such as Miami and San Diego with their 7.7 percent annual decline had become the recorders in the sales drop. Even Las Vegas, Detroit, Phoenix, or Los Angeles belongs to cities with considerable decline of home prices. These prices fell 8.4 percent because of decline of Standard & Poor Index. On the other hand Michelle Meyer, an economist at Lehman Brothers Holding Inc. claimed the home prices are declining because of weak demand and the disability homeowners to get out of costly loans. The biggest misgivings of FED refer to continuing crisis of home sector which didn't reach a bottom and its continuous decline could have a negative influence on the US economy. FED reacted on this situation by cutting its federal funds which could give housing a boost, but Shiller thinks "it won't be enough to stop a prices decline. " After all he added: "The best that we could hope for is a slower pace of declines."

related story: http://news.yahoo.com/s/nm/20080129/us_nm/usa_housing_prices_dc;_ylt=At2K_C4UHfNkV_b7OoL9mJ.s0NUE

by Barbora Misakova for PocketNews (http://pocketnews.tv)

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