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U.S. Housing Price Forecast: Double-Digit Percentage Decline Still Ahead

“Housing rebound still fragile; St. Louis sales down 16% from May ‘08”

-St. Louis Post-Dispatch, June 23, 2009

“Option ARMs reset threatens housing rebound”

-Seattle Times, June 27, 2009

“Housing rebound continues, barely”

CNN Money.com, July 1, 2009

From headlines like these, I apparently slept through the U.S. housing bottom. Then again, maybe not. From Reuters today:

U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said.

Meyer issued her forecast two days after the Standard & Poor’s/Case-Shiller Home Price Indexes showed for April an 18.1 percent year-to-year decline, compared with 18.7 percent in March, in the rate of home price declines in 20 major U.S. metropolitan areas.

The indexes have tracked the prices of U.S. single-family homes since 1987.

“While the early signs of improvement are in place for housing, the market will likely remain out of balance for some time, given the flood of foreclosures,” Meyer wrote.

“Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession.” Home prices have fallen 32.6 percent from their peak three years ago, S&P/Case-Shiller said.

On that basis, they would need to fall another 11 percent for an overall 40 percent peak-to-trough decline. Further declines could imperil metropolitan areas that have yet to experience the worst of the nation’s housing slump.

According to S&P/Case-Shiller, New York was the only major market to have above-average, month-over-month housing price declines in both March and April and also have a below-average decline for the year ended in April.

Home prices in that market fell 12.5 percent from a year earlier. The Denver area had the smallest drop, 4.9 percent.

Bloomberg’s Oshrat Carmiel talked more about the Manhattan residential real estate market today. Carmiel wrote:

Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.

The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.

“The standstill that existed after Lehman Brothers has been broken, and it was the sellers that cried uncle,” Pamela Liebman, chief executive officer of New York-based property broker the Corcoran Group, said in an interview.

Values are falling broadly in Manhattan for the first time in the almost four-year U.S. housing recession, with declines now seen in co-operatives and condominiums of every size and price. Private-sector employment in the city dropped by 91,200 jobs, or 2.8 percent, in the 12 months through May as Wall Street losses and asset writedowns topped $1.4 trillion.

The price of studio apartments declined 16 percent from a year ago to a median of $405,000, according to Miller Samuel. One-bedrooms dropped 17 percent to $650,000 and two-bedrooms fell 23 percent to $1.27 million. Three-bedroom units fell 37 percent to $2.35 million and four-bedrooms plummeted 47 percent to a median of $3.92 million.

Wake me when the housing bottom arrives, please.

Sources:

“US Home Prices Seen Falling 40% Overall: Analyst”
Reuters, July 2, 2009

“Manhattan Apartment Prices Drop as Lehman Hits Home (Update1)”
Oshrat Carmiel
Bloomberg, July 2, 2009

Weird Housing Tales, Part 20

When foreclosures are involved, weird stuff happens.  From the Chicago Tribune’s Mary Umberger this past weekend:

A Minneapolis man who city officials say had ample warning that municipal employees were coming to board up his foreclosed, ramshackle house because it represented a safety hazard learned recently that apparently he should move more quickly.

Ted Poetsch, who uses a walker to get around, told the Minneapolis Star Tribune that he was eating lunch when the crew arrived, and he began gathering some possessions— and then the truck drove away, having boarded up the home with Poetsch inside. Unable to leave, he phoned his lawyer, who eventually got police and a representative of the board-up company to return to help him get out.

Why do I have a feeling there’s more to the story than this?  Did Poetsch purposely get himself boarded-up in order to play the sympathy card to save his home? Or perhaps some malicious city official wanted Poetsch boarded-up in his home (likely scenario here in the Windy City). Or maybe the board-up company employees were just plain careless all along.

I smell a lawsuit…

Source:

“The word from Washigton: Market near bottom- maybe”
Mary Umberger
Chicago Tribune, June 28, 2009

Barney Frank: Lower Lending Standards For Condo Buyers?

“There’s no trick to being a humorist when you have the whole government working for you”

-Will Rogers (American entertainer. 1879-1935)

Some people never learn. From the Wall Street Journal on Wednesday:

Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to “roll the dice” in the name of affordable housing. That didn’t turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity — with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.

Fannie and Freddie have restricted loans to condo buyers in these situations because they represent a red flag that the developments — many of which were planned and built at the height of the housing bubble — may face financial trouble down the road. But never mind all that. Messrs. Frank and Weiner think, in all their wisdom and years of experience underwriting mortgages, that the new rules “may be too onerous.”

Rep. Barney Frank, June 27, 2005: No Housing Bubble
YouTube Video Link

Source:

“Barney the Underwriter”
Wall Street Journal, June 24, 2009

Top Ten States With Highest Foreclosure Rates

Nothing funny with this “Top Ten” list…

States with the ten highest foreclosure rates in May 2009:

10. Ohio- 1 in every 446 households
9. Idaho- 1 in every 437 households
8. Colorado- 1 in every 436 households
7. Georgia- 1 in every 377 households
6. Michigan- 1 in every 326 households
5. Utah- 1 in every 316 households
4. Arizona- 1 in every 158 households
3. Florida- 1 in every 148 households
2. California- 1 in every 144 households

and numero uno,

1. Nevada- 1 in every 64 households

Tent City, Reno, Nevada

Source:

“Highest State Foreclosure Rates”
Slideshow
CNBC, June 11, 2009

Get a 7-Day FREE trial with RealtyTrac! Find a foreclosed property now!

Coldwell Banker: Spring Home-Buying Season ‘Lackluster’

Curious about how the spring home-buying season went this year? Here’s what the head of Coldwell Banker had to say. From Reuters last night:

This year’s peak home-buying season was lackluster, as buyers seeking to trade up to larger houses were absent, said the head of one of the country’s largest real estate firms.

Jim Gillespie, president and chief executive of Coldwell Banker Real Estate, in an interview with Reuters, said sales were only modest during the spring, with demand overwhelmingly dominated by first-time home buyers and investors.

“The more important ‘move-up’ buyers were absent and that is not encouraging,” said Gillespie, who is based in Parsippany, New Jersey.

Move-up buyers are those seeking to trade in their current home for a larger one, and Gillespie said that group is important for sustaining a healthy real estate market.

Because of the sharp decline in housing prices and the collapse in consumer demand, homeowners are having difficulty selling their current homes to move up to pricier properties.

“They are key to a U.S. housing market recovery,” he said. Gillespie said some of this lack of demand could be alleviated through more incentives. He recently met with U.S. Congressional leaders to discuss housing, and said he supports a bill currently in the Senate calling for a $15,000 tax credit for all buyers of primary residences, with no income limit, for a period of 12 months.

The current $8,000 tax credit, first passed in February as part of a $787 billion fiscal stimulus plan, is limited to first-time home buyers and expires at the end of November. The proposed plan would expand eligibility to all home buyers and increase the credit to $15,000.

Source:

“Housing Sales Lackluster This Spring: Coldwell”
Reuters, June 18, 2009

Forecast: New York City Housing Prices To Plummet

If you live in the Big Apple, you might have heard about the latest Deutsche Bank forecast on housing prices for your area. And you’re probably hoping they’re wrong. Very wrong. From the Wall Street Journal website this past Tuesday:

How much further could home prices tumble in the New York City metro area? Deutsche Bank predicts a decline of 40.6% from the first quarter of 2009.

That’s a slight improvement over the 47.4% decline that the bank’s analysts had forecast in March, and it reflects in part the fact that prices have dropped since then. Still, prices would have to drop another 32% from the first quarter of 2009 to return the New York market to levels of affordability not seen since 1998.

Affordability measures whether a household at the median family income could purchase a home given median prices and at prevailing interest rates. (Deutsche Bank assumes a 5% mortgage rate, which means that prices could have to fall further if interest rates don’t return to the 5% level that they reached earlier this year.)

Already, affordability in some 74 of the top 100 U.S. housing markets have already returned to their historic highs.

Median prices in the first quarter of 2009 dropped to $446,000 in New York, down 19% from the peak of $552,000 set in the second quarter of 2007. Deutsche Bank forecasts a total peak-to-trough decline of 52.1%.

Some of the top California housing markets are now undervalued based strictly on affordability. But rising job loss and price-cutting foreclosure sales could lead to another 11% price decline in Los Angeles and a 14% decline for Riverside, Calif. San Diego appears closest to the bottom, with just another 8.7% decline before reaching bottom.

Bloomberg’s Brian Louis also picked up on the Deutsche Bank forecast, and added:

U.S. home prices may fall another 14 percent, led by the New York and Orange County, California, metropolitan areas, before reaching a bottom as an increase in unemployment offsets lower prices, Deutsche Bank AG said.

“Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,” Deutsche Bank analysts led by Karen Weaver, wrote in a report yesterday. “The bottom is getting closer, but we are not there yet.”

Home prices are forecast to fall 41.7 percent from their peak, Weaver said. That’s higher than a forecast she released in March and reflects “the actual declines to date and the expected future impact on home prices from rising foreclosure inventory and unemployment.”

Suzanne!!!

“Suzanne Researched This”
YouTube Video Link

Sources:

“Deutsche Bank Predicts 40% Drop in New York Home Prices”
Wall Street Journal, June 16, 2009

“U.S. Home Prices to Fall 14% More, Deutsche Says (Update1)”
Brian Louis
Bloomberg, June 16, 2009

Congress Scrutinized For Potential Conflicts-Of-Interest

Washington lawmakers are receiving more attention these days for possible conflicts-of-interest relating to the taxpayer bailouts and the proposed health care system overhaul. From the Washington Post’s Paul Kane and Carol D. Leonnig last week:

Top House lawmakers had considerable holdings in major financial institutions that took billions of dollars in taxpayer bailouts at the end of last year, according to annual financial disclosure reports released yesterday.

From stock holdings to retirement funds to mortgages, more than 20 House leaders and members of the House Financial Services Committee had large personal stakes in the Wall Street powerhouses whose collapse last year led to an unprecedented government intervention in the marketplace. In some instances those lawmakers, like millions of other investors, sold their holdings at steep losses while others retained the stocks at greatly diminished value.

House Speaker Nancy Pelosi (D-Calif.) and her husband lost hundreds of thousands of dollars investing in American International Group, which has received $170 billion in government loans and cash injections, making it by far the largest recipient of federal bailout dollars. Republican Whip Eric Cantor (R-Va.) and his wife held stock, retirement plans and other investments worth at least $183,000 and as much as $495,000 in firms benefiting from federal government rescue efforts, including Goldman Sachs and Morgan Stanley.

At least 18 members of the House Financial Services Committee — which oversees the banking and housing industries at the core of the economic meltdown — held stock last year in firms that received federal bailout assistance, according to a review of the forms that were available yesterday.

As President Obama pushes his universal health care program, more potential conflicts-of-interest involving lawmakers have surfaced. From the Associated Press’ Larry Margasak and Sharon Theimer last Friday:

Influential senators working to overhaul the nation’s health care system have investments and family ties with some of the biggest names in the industry. The wife of Sen. Chris Dodd, the lawmaker in charge of writing the Senate’s bill, sits on the boards of four health care companies.

Members of both parties have industry connections, including Democrats Jay Rockefeller and Tom Harkin, in addition to Dodd, and Republicans Tom Coburn, Judd Gregg, John Kyl and Orrin Hatch, financial reports showed Friday.

Jackie Clegg Dodd, wife of the Connecticut Democrat, is on the boards of Javelin Pharmaceuticals Inc., Cardiome Pharma Corp., Brookdale Senior Living and Pear Tree Pharmaceuticals…

Other publicly available documents show Mrs. Dodd last year was one of the most highly compensated non-employee members of the Javelin Pharmaceuticals Inc. board, on which she has served since 2004. She earned $32,000 in fees and $109,587 in stock option awards last year, according to the company’s SEC filings.

Mrs. Dodd earned $79,063 in fees from Cardiome in its last fiscal year, while Brookdale Senior Living gave her $122,231 in stock awards in 2008, their SEC filings show. She earned no income from her post as a director for Pear Tree Pharmaceuticals but holds up to $15,000 in stock in Pear Tree, which describes itself as a development-stage pharmaceutical company focused on the needs of aging women.

Sources:

“Lawmakers Invested in Bailed-Out Firms”
Paul Kane, Carol D. Leonnig
Washington Post, June 11, 2009

“Key health care senators have industry ties”
Larry Margasak, Sharon Theimer
Associated Press, June 12, 2009

Roubini, Shiller, Whitney: No Economic, Housing Recovery Just Yet

Green shoots, or deceptive weeds? From Reuters this morning:

A rebound in key U.S. economic indicators masks an underlying malaise that will likely hamstring growth for many years and keep housing and banks in a rut, several top economists said Monday.

Nouriel Roubini, president of RGE Monitor, said a recovery in risk assets like stocks and emerging markets would not last, since it had been based on unrealistic expectations for a global economic rebound.

“I see subpar, anemic, below-trend growth for the next couple of years,” Roubini said on a panel sponsored by Time Warner.

Housing expert and MIT Professor Robert Shiller was equally pessimistic, saying, with regards to the four-year housing downturn: “This thing is not over yet.”

Banking analyst Meredith Whitney said she was even more bearish than her fellow panelists, saying that better bank earnings would eventually be challenged by the toxic assets on their balance sheets.

Wonder if there’ll be more “money manure” coming from Washington down the road…

Source:

“More Pain Ahead For US Economy: Roubini, Shiller”
Reuters, June 15, 2009

Foreign Investors Growing Tired Of American Assets?

The month of April saw waning demand for American assets by overseas investors. From Bloomberg’s Vincent Del Giudice this morning:

International purchases of American financial assets grew more slowly in April as China, Japan and Russia pared demand for Treasuries, underscoring the danger of U.S. reliance on foreigners to finance its fiscal deficit.

Total net purchases of long-term equities, notes and bonds rose a net $11.2 billion, compared with buying of $55.4 billion in March, the Treasury said today in Washington. International holdings of Treasuries increased a net $41.9 billion, compared with the $55.3 billion gain in March. Including bills, the holdings fell a net $2.6 billion…

Including short-term securities such as stock swaps, foreigners sold a net $53.2 billion of U.S. financial assets, compared with net buying of $25 billion the previous month…

Foreign investments in U.S. agency debt slumped for the eighth time in 10 months, by $2.5 billion in April. Net purchases of American equities slowed to $4.6 billion in April from $13.2 billion the prior month. Holdings of corporate bonds tumbled a net $9.7 billion, the biggest decline since November.

China, the largest holder of U.S. Treasury securities, cut back their holdings to $763.5 billion in April from $767.9 billion in March. Japan, the second largest holder of Treasuries, reduced theirs to $685.9 billion from $686.7 billion a month earlier. China’s holdings of Treasuries represent about 10% of America’s publicly-held debt.

Bloomberg’s Del Giudice noted:

Waning demand for Treasuries may exacerbate a jump in yields that threatens to make it harder for the U.S. to pull out of its deepest recession in at least half a century. Yields on benchmark 10-year notes have climbed more than 1 percentage point since mid-March, contributing to an increase in mortgage rates that’s counteracting Fed efforts to aid the housing market.

Source:

“International Demand for U.S. Assets Slowed in April (Update3)”
Vincent Del Giudice
Bloomberg, June 15, 2009

Investigation Reveals U.S. Banks Getting Weaker

I give up.

I’ve spent the last 10 minutes on Google looking for a recent headline from any publication pronouncing the U.S. banking system healthy so that I might use it as an intro to this post.

I didn’t find any.

The banking industry, as a whole, was worse off at the end of last quarter than it was three months prior, according to MSNBC investigative reporter Bill Dedman. He wrote on their website Thursday:

Bad loans on real estate continue to push harder on the nation’s banks.

At the end of the first quarter, six out of every 10 banks in the U.S. were less well prepared to withstand their potential loan losses than they had been at the end of 2008, according to a new analysis by msnbc.com and the Investigative Reporting Workshop at American University in Washington. Overall, bad loans rose another 22 percent in the quarter as the recession continued.

Msnbc.com is publishing information on the nation’s 400 largest banks as well as all banks with high ratios of troubled loans to assets. Information on the financial health of more than 8,000 banks nationwide is available at the updated BankTracker site published by the American University group.

The analysis relies on information reported through March 31 to the Federal Deposit Insurance Corp., calculating each bank’s troubled asset ratio, which compares troubled loans against the bank’s capital and loan loss reserves. A similar ratio, known as a Texas Ratio, is commonly used by bank analysts as a snapshot of a bank’s financial health, though it can’t capture all the nuances of a bank’s condition.

Although much attention has been focused on surprising profits at U.S. banks in the first quarter of 2009, under the surface lurks an industry still suffering from the recession. If you set aside the 10 largest banks, the rest of the industry lost money in the quarter, primarily because of very large losses at a few banks.

While the 10 largest banks reported $10.2 billion in earnings for the quarter, the remaining 8,245 banks together lost $2.6 billion, according to the analysis.

One in five banks lost money in the quarter, and several lost big, weighing down the rest.

Four large banks account for more than $5 billion in losses. Huntington National Bank of Columbus, Ohio, lost $2.46 billion. FIA Card Services of Wilmington, Del., lost $1.47 billion. SunTrust Bank of Atlanta lost $783 million. Sovereign Bank of Wyomissing, Pa., lost $764 million.

Source:

“Most banks still weakening, analysis shows”
Bill Dedman
MSNBC, June 11, 2009

Personal Wealth Declines By $1.3 Trillion In First Quarter

In case you hadn’t already heard…

From Associated Press economics writer Jeannine Aversa yesterday:

The brute force of the recession earlier this year turned back the clock on Americans’ personal wealth to 2004 and wiped out a staggering $1.3 trillion as home values shrank and investments withered.

Net worth, or the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards, declined 2.6 percent in the first three months of the year, the Federal Reserve said Thursday…

While the first quarter was ugly, the hit to Americans’ net worth was worse late last year. In the October-December period, it fell a record 8.6 percent, according to revised figures. That was the largest drop on record dating to 1951.

If Americans continue to spend — no guarantee — Fed Chairman Ben Bernanke and other economists say they think the recession will end late this year. But if shoppers hunker down and cut spending again, that could delay any recovery. Late last year, Americans cut spending at the fastest rate in 28 years.

Some economists believe thrift may be the norm for a while. Aversa added:

Even if things improve, such a dramatic evaporation of wealth will probably make Americans more thrifty down the road, said Scott Hoyt, senior director of consumer economics at Moody’s Economy.com.

“The bulk of consumers alive today have not experienced declines in wealth like this,” Hoyt said. “They are already turning thrifty, and it will stay that way beyond the short term. This has been a significant learning experience.”

Should this be the case, it would not bode well for the U.S. economy, where it is suggested consumer spending accounts for 70% of the nation’s economic activity.

Source:

“1st quarter wiped out $1.3 trillion for Americans”
Jeannine Aversa
Associated Press, June 11, 2009

Two Sides To Every (Housing) Story

Some time ago I was interviewed by Tony Sclafani, an MSNBC.com contributor, for a piece he wrote regarding the decline of newspapers. From the article:

Chicago financial research analyst Christopher Hill says he let his newspaper subscription lapse and prefers instead to scour a variety of news sources online. That way, he says, he’s assured of seeing “both sides of the stories.” The 35-year-old, who runs the financial blog Boom2Bust.com, says he’s noticed that his blog’s commenters will call him out when he fails to present a balanced overview of a particular issue.

“There might be a story that focuses on the U.S. housing market and the source might be the National Association of Realtors — and that might be the only side of the story you hear,” Hill says.

Last weekend, I came across an article in the Chicago Tribune which I thought was a pretty good example of what I was referring to in that interview. Nicholas Riccardi wrote on June 7:

Phoenix’s housing bust has turned into a quasi-boom, a sign that its market might have hit bottom and a preview of what a housing recovery could look like.

More homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers again are in bidding wars — only this time over foreclosed houses selling at deep discounts rather than ranch homes listing for vast sums.

Riccardi’s sources? Individuals who could stand to gain from a rebound in the Phoenix housing market. From the piece:

“The free market is at work,” said Shannon Hubbard, a real estate agent and blogger. “Prices got driven down so much that people said, ‘I’m going to come out and play.’ “

Hubbard writes on BlogArizona.com:

I’m a Realtor-Investor, maintaining an active real estate license with Great American Realty, Inc. I’m also Co-owner of Homewerx Home Inspections, and Owner of BlogArizona.com.

Next, Riccardi quoted a real estate consulting firm. He wrote:

John Burns Real Estate Consulting in February identified Phoenix as “the most unique market in the nation,” where affordability was better than at any time since 1981.

While looking through the consultant’s website, I came across the following in a recent newsletter:

Will tax credits, low mortgage rates, low prices, and continued aggressive government lending turn around the housing market? We HOPE.

Sounds like they can’t wait for a housing turnaround. Here’s another one:

Mike Orr, a Phoenix real estate analyst, thinks the housing market already has hit bottom.

Mr. Orr is not only a real estate analyst, but also an agent, according to the Arizona Republic’s Catherine Reagor in an April 2009 housing-related article.

Finally, there’s the real estate professor. Riccardi wrote:

Arizona State University business professor Karl Gunterman noted the incremental slowing in a report late last month, saying it could be a sign of the market bottoming.

Professor Gunterman, who is also an officer for the American Real Estate Society, talked about the Phoenix real estate market back on October 20, 2008. From the Phoenix Business Journal:

ASU real estate professor Karl Gunterman believes depreciation is beginning to level off, but says prices still are not at rock bottom. He expects the downward trend to continue as August and September are released, but not as steeply.

Was Gunterman correct about his “theory of depreciation?” See for yourself:

Phoenix (AZ) Housing Market
Source: ActiveRain.com

I’m not writing this to bash the author of this Tribune article, or his sources. However, as I indicated in that MSNBC interview, I believe readers deserve to be given access to both sides of the story, where applicable. By that, I mean it’s one thing to write a story about the activities of the local gardening club, and it’s another to pen an article about the perceived direction of residential real estate sales and prices. One point of view is not enough for the housing piece.

Unfortunately, this is what readers are left with many times.

By not addressing both sides of the story when warranted, the journalist may be left with nothing more than a press release or sales pitch on behalf of the source(s) used.

So, is there another side to the Phoenix housing story? Well, consider the following from Bloomberg’s Kathleen Howley and Erik Schatzker today:

U.S. home prices may continue to tumble for years, according to economist and Yale University professor Robert J. Shiller.

“Our sense that housing is a wonderful investment is really damaged now,” Shiller said in an interview with Bloomberg Television today…

The Standard & Poor’s/Case-Shiller national index of home prices, named after the professor, has fallen 32 percent from a high in the second quarter of 2006.

Shiller is famous for having warned of the housing bust while most other housing “experts” didn’t see it coming. In fact, he was often ridiculed for his comments about an impending housing bubble.

Based on Shiller’s latest outlook, it makes one wonder if we’ve really reached a bottom in housing.

Who knows? But having access to both sides of the story sure is nice.

Source:

“Bidding wars are back — at low end”
Nicholas Riccardi
Chicago Tribune, June 7, 2009

“Housing price declines head for record territory”
Jan Bucholz
Phoenix Business Journal, October 20, 2008

“Shiller Says U.S. Home Prices May Decline for Years (Update1)”
Kathleen M. Howley, Erik Schatzker
Bloomberg, June 9, 2009

Funny, But…

I have to wonder how many inquiries this homeowner has gotten from prospective buyers…

It’s A Mad World After All

On Monday, the Federal Bureau of Investigation released their crime statistics for all of 2008. And, I, for one, am surprised at what the data revealed. From the Associated Press:

Cities in the United States got safer in 2008, while small towns grew more dangerous, according to FBI data released Monday.

The FBI says violent crime nationwide dropped by 2.5% last year. Property crimes also fell by 1.6%, according to the preliminary data collected by the FBI.

Cities with more than 1 million people saw murders fall by 4.3%; cities with 500,000 to 1 million people saw murders fall by nearly 8%, according to the FBI.

Yet in towns with fewer than 10,000 residents, murders rose 5.5%, rape increased 1.4%, and robbery 3.9%, the agency reported.

The latest data show violent crime fell for a second straight year, after increases in 2006 and 2005…

Nationwide, murder and manslaughter dropped 4.4% in 2008.
Aggravated assault declined 3.2%, forcible rape decreased 2.2%, and robbery dropped 1.1%, according to the FBI. The country also saw a huge drop in car thefts — more than 13%.

The western region of the country saw the biggest declines, with a 4.2% drop in property crime and a 3.4% drop in violent crime. The Northeast saw a slight increase in property crime, which rose by 1.6%.

Also just released were the results from an annual study of global violence. In comparison to the U.S. crime numbers, there wasn’t much of a surprise here. From Reuters’ Peter Griffiths yesterday:

The economic downturn has made the world more violent and unstable in the last year, according to a study Tuesday that ranked New Zealand as the most peaceful country and Iraq the least.

The impact of high food and fuel prices in early 2008 and the deepening recession later in the year eroded peace, according to the Global Peace Index, compiled by a unit of The Economist magazine group.

Economic weakening has increased political instability, demonstrations and crime in some countries, according to the study, which is online at www.visionofhumanity.org/gpi/home.php.

“Rapidly rising unemployment, pay freezes and falls in the value of house prices, savings and pensions is causing popular resentment in many countries, with political repercussions,” the report says.

Iceland, the most peaceful nation last year, fell to fourth place after violent protests over its economic meltdown.

“There is a very, very strong correlation between peace and wealth,” Steve Killelea, founder of the Global Peace Index, told Reuters. “Peace is a leading indicator on economic prosperity.”

New Zealand replaced Iceland at the head of the table of 144 countries. The top 10 included all the main Scandinavian nations as well as Austria in fifth place, Japan seventh and Canada eighth…

The United States rose six places to 83rd, wedged between Ukraine and Kazakhstan.

Kazakhstan…

Sources:

“FBI: U.S. crime falls, but small town violence up”
Associated Press, June 1, 2009

“Global recession making world more violent: study”
Peter Griffiths
Reuters, June 2, 2009