Decline and Fall of the Housing Market

A summary of what's in the major U.S. newspapers.
Aug. 26 2007 6:43 AM

Decline and Fall of the Housing Market

How long will the housing bust last?

The New York Times leads with a historic nationwide drop in home prices. The Washington Post leads with the Democratic National Committee voting to strip Florida of its delegates at the 2008 Democratic National Convention if the state goes ahead with its planned Jan. 29 primary. The Los Angeles Times leads, at least online, with an investigation of cell phones' effects on 911 systems.

Since home price tracking began in 1950, there has never been a nationwide year-to-year decline in the price of homes. In fact, many economists considered a national drop in housing prices impossible. But it's happening: the government index of the cost of a home is released next week the cost is expected to be 1 to 2 percent lower than last year. Some experts think prices could dip as low as 10 percent (adjusted for inflation) by 2009. It could take up to a decade for the price of homes to rebound. The NYT puts a positive spin on the story, predicting the decline will have a modest impact on the economy as a whole, since the year-to-year cost of homes has little impact on most home owners. The NYT also charts prices over time in a variety of cities.

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            New DNC rules bar states from moving their primaries before the first Tuesday in February, in hopes of containing the rush of early primaries. Under the DNC's ruling, Florida will have its delegates reinstated if it changes its primary date within the next 30 days. All the papers call the move a shot across the bow of other states that considering moving up their primary dates. Florida Democrats pled extenuating circumstances, arguing that the change was approved by Florida's Republican controlled legislature. State Democrats agreed to vote for the new date after it was tied to a Republican-backed tax ballot initiative, which Democrats hoped to defeat with higher turnout from the primary. The NYT and the LAT decide to go inside with their  coverage.

            The LAT's report on 911 delays is a local story about a larger problem with emergency infrastructure. Emergency services are being overwhelmed by growing numbers of cell phone calls reporting the same incident, along with dropped or interrupted calls, all of which increases average wait times for all callers.

The NYT off-leads with a special report on pollution in China. The paper says industrial pollution in China is the only thing growing as fast as China's economy. China's explosive growth over the last decade has relied on heavy industry powered by inefficient, dirty coal power plants. The paper says that while officials in the ruling party are aware of the problem, the government's obsession with growth as the antidote for social unrest has made real reforms all but impossible. While most developed countries deal with pollution after their economies mature, China may not have that luxury- the paper compares China to "a teenage smoker with emphysema." The article is filled with gloomy facts and figures, though the paper also claims that these Western pollution estimates are probably "conservative," and that the problem is likely much worse.

            The WP off-leads with an update on the recovery of New Orleans two years after Hurricane Katrina. The piece focuses on St. Bernard's parish, where many pre-storm residents have decided they're never coming back. Those vacancies have left the people that did return with a lack of even basic utilities and community outlets. Inside, the paper runs a feature on the storm's effect on the city's famous music scene.

Over the years Iran's Revolutionary Guard has become a lot more than just a military establishment, reports the LAT. Despite being founded to vouchsafe the Islamic ideals of the Iranian revolution, it's now one of Iran's largest business enterprises. The paper estimates the guard has ties to more $12 billion in business and construction deals, a fact that could make potential U.S. sanctions against the guard much more damaging to the Iranian economy.

The NYT covers the dozens of lawmakers who've visited Iraq this summer. If the target sounds a little broad, it's because the NYT says the visits have a "'how I spent my summer vacation' sameness" to them, as U.S. and Iraqi officials try to persuade them to give the U.S. strategy in Iraq more time.

The first criminal case involving the NSA's secret surveillance program may provide privacy activists with their best chance of challenging the program's legality, says the NYT.

The LAT reports a rare bit of "good" news from Sudan, as the death rate has dropped dramatically in the Darfur region over the last three years. Improved health care and less violence have driven the fatality rate down from as high as 10,000 deaths per month to as little as 100 deaths. Of course, the paper also says that doesn't mean the conflict has died out, just that the militias that were burning villages three years ago are now falling back on non-lethal intimidation tactics, including rape.

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