Monday, February 14, 2011 3:19 PM

Housing Crash Bites Deeper; Economic Reality Trumps "It's Different Here"; Unprecedented Double-Dip

The popular housing notions "It's different this time" as well as the highly regarded corollary "It's different here" continue to bite the big one.

While housing in some cities will always carry a premium, fundamentals, especially price-to-rent ratios, property taxes, and wage growth will eventually matter.

Those fundamentals caught up to cities thought to be immune to a housing slump.

Please consider Housing Crash Is Hitting Cities Once Thought to Be Stable http://www.nytimes.com/2011/02/14/busin ... ted=1&_r=1

SEATTLE — Few believed the housing market here would ever collapse. Now they wonder if it will ever stop slumping.

The rolling real estate crash that ravaged Florida and the Southwest is delivering a new wave of distress to communities once thought to be immune — economically diversified cities where the boom was relatively restrained.

In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.

Seattle is down about 31 percent from its mid-2007 peak and, according to Zillow’s calculations, still has as much as 10 percent to fall. Mr. Humphries [chief economist for Zillow] estimates the rest of the country will drop a further 5 and 7 percent as last year’s tax credits for home buyers continue to wear off.

CoreLogic, a data firm, said last week that American home prices fell 5.5 percent in 2010, back to the recession low of March 2009. New home sales are scraping along the bottom. Mortgage applications are near a 15-year low, boding ill for the rest of the winter.

“I don’t expect the market to get better,â€