NEW YORK (AP) - Home prices tumbled by the steepest annual rate on record in the fourth quarter, two housing indexes showed Tuesday, and the pace of decline continued to gain speed in all but a handful of battered cities.
The farther prices fall, the fewer homeowners may be able to qualify for President Barack Obama's mortgage relief plan. Last week, the president estimated up to 5 million borrowers in good standing who don't owe more than 105 percent of their home's current value would be able to refinance into a lower interest-rate loan.
Though details of the plan won't be released until March 4, almost 14 million homeowners are already under water, according to Moody's Economy.com, meaning they owe more on their mortgages than their homes are worth. Nationally, home prices have receded to 2003-levels, and half of the metro areas in the 20-city Case-Shiller Home Price Index have lost more than 20 percent of their values from their peaks in 2006, including Las Vegas, Phoenix and Miami.
"If they don't get (the plan) into place very soon, it will be out of our reach to help these people," said Mark Zandi, chief economist for Moody's Economy.com.
Americans are feeling grim about the prospects of any turnaround. Consumer confidence index sank to new lows in February as huge job cuts, shrinking retirement accounts and plunging home prices fueled fears, the Conference Board said Tuesday.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index plunged 18.2 percent during the quarter from the same period a year ago, the largest drop in its 21-year history.
Meanwhile, the Federal Housing Finance Agency said Tuesday that home prices dropped 8.2 percent from a year earlier, its largest annual decline on record since 1991.
The reports did offer a meager amount of good news. The rate of year-over-year price declines moderated in Boston, Denver, Los Angeles, San Diego and Washington, according to the Case-Shiller index, while cities in Washington, North Dakota and Texas posted year-over-year quarterly gains, the government said.
But the Sun Belt cities continue to get clobbered. Phoenix, Las Vegas and San Francisco all saw home values lose more than 30 percent in December, the Case-Shiller index said. And the government index showed many California and Florida cities clocked their worst declines in the fourth quarter.
Prices in the Case-Shiller 20-city index have plunged 27 percent from their peak in the summer of 2006, and the 10-city index has fallen more than 28 percent. Both indices have recorded year-over-year declines for 24 straight months.
On Wednesday, the National Association of Realtors releases its existing home sales data for January and the Commerce Department releases its new home sales figures for January on Thursday.
After lots of work, Manhattan diner opens in Wyo. By MEAD GRUVER, Associated Press Writer
LABARGE, Wyo. (AP) - Freshly fired from his job hauling mud, Joe Henshaw was propping up his spirits with a chili cheeseburger at an uncommon place for this remote western Wyoming town: A diner.
"A diner in LaBarge? That's like putting a fish in the Mojave Desert. Usually we kill our own food around here," he said during a recent lunch.
Making the Moondance Diner even stranger is that it's an import - an 80-year-old Manhattan eatery hauled out here and recently reopened.
But if Henshaw's luck is anything like that of the Moondance, which went through hell on the way to resurrection in Wyoming, better times lie ahead.
The former fixture of chic SoHo is now an incongruous landmark in sagebrush country, brought to its new home through eight states.
Even so, the Moondance hasn't looked this good in years - decades, maybe - and seems to be doing decent business serving ranchers, roughnecks and visitors to Wyoming's scenic wonders.
Its owners, Cheryl and Vince Pierce, have realized their dream, despite enough setbacks to croon a country song. After months of weather complications and a struggle to secure financing for the $400,000 project, the diner opened in mid-January.
"The banks around here were pretty skeptical about the whole thing, you know, just because it was a restaurant and we're a small area," said Cheryl Pierce, a lifelong resident of Sublette County. "It was very difficult to convince them it's a worthy cause."
The Moondance Diner isn't the only Manhattan restaurant relocating. A businessman recently bought the Cheyenne Diner and plans to move the West Side eatery by flatbed truck to Birmingham, Ala.
The Pierces had been toying with the idea of starting a restaurant in LaBarge - a town of about 600 people 135 miles northeast of Salt Lake City - when Vince Pierce spotted the Moondance for sale in the summer of 2007. They flew out to New York a few days later. His wife had never been to the Big Apple before.
When they first stepped inside the weary old Moondance, they knew they were on to something.
"There was something in our gut that just said, 'This could be it,"' Cheryl Pierce said.
A few weeks later, Vince Pierce and Cheryl's father, who owns a trucking company, returned to Manhattan with a big rig and flatbed trailer. They paid just $7,500 to buy the diner and save it from condo development.
Everything considered, it wasn't exactly a bargain.
Torrential rains and permit snafus slowed them down before they even got the diner out of New York. A week later, they settled the diner onto stacks of railroad ties in LaBarge.
"It was a dilapidated little tin house," recalled Vince Pierce's mom, Judy McCracken, of Horse Prairie, Mont. "I started to cry."
Like any blue-collar Wyoming couple, the Pierces knew what to do. They got to work.
Working with a contractor, they removed everything inside: counters, stools and fixtures. They scraped five layers of tile from the floor. They peeled off most of the stainless steel from the inside and outside. They stored the enormous "Moondance" sign and other salvageable items.
They set about restoring the diner, using how it looked after a renovation in 1983 as a guide. They referred to old photographs and scoured the Internet for just the right fixtures and trim to replicate the clean, bright, modern atmosphere.
Then last winter, a blizzard dumped 18 inches of snow on the roof. The walls of the diner separated and the roof collapsed - while the general contractor and two workers were inside. No one was hurt.
"I thought they probably would have canned the whole thing," said local resident Jessica Bush. "It basically looked like a tin box. It didn't even look like a building."
To Cheryl Pierce, though, the collapse was a blessing in disguise. They had been wondering how to go about renovating the vaulted roof. Now they knew: A construction company would rebuild it, truss by truss.
After months of delays, the Pierces reopened the Moondance on Jan. 12. They've been so busy since, they've called on friends and relatives to help. McCracken, who is a ranch cook back in Montana, has been supervising the kitchen.
"I'm used to cooking for a sit-down group, a big roast or a big meatloaf or big lasagna for, you know, 20 people," she said. "But I have done this quite a bit in my life."
One day last month, investment banker John Sanderson walked into the diner. A Manhattan resident for 31 years, he was traveling through on vacation.
"My first thought was, 'Have I eaten in here before?"' Sanderson said. "It's very possible."
The Moondance already has had many visitors from all over the world - and media attention.
"I couldn't understand what the hubbub was, the fascination," Cheryl Pierce said. "Just the fact, I guess, that we're from Wyoming, was like taking a black and white movie and giving it color again."
On the Net:
Moondance Diner: http://www.historicmoondancediner.com
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