Sales of existing homes plunged far more than expected last month as buyers recoiled from October's financial wreckage on Wall Street. The median sales price fell by the largest amount on record.

The National Association of Realtors said Tuesday existing home sales fell 8.6 percent to an annual rate of 4.49 million in November, from a downwardly revised pace of 4.91 million in October.

Sales had been expected to fall to a pace of 4.9 million units. according to Thomson Reuters.

The median sales price plunged 13.2 percent in November to $181,300, from $208,000 a year ago. That was the lowest price since February 2004, the biggest year-over-year drop on records going back to 1968 and most likely the biggest drop since the Great Depression.

Lawrence Yun, the normally upbeat chief economist of the Realtors group, found few positive spots in the month's dismal data. But he did note that after prior stock market crashes home sales usually rebounded within a few months.

"We hope that, similarly, the current slowdown in home sales activity is a short-term phenomenon," Yun said, noting that people in the real estate industry are "crossing our fingers" that the market will recover. Sales fell around the country, with the largest drop - of 12 percent - in the Northeast.

Nationally, the Realtors group estimates that sales of distressed properties made up 45 percent of all property sales in November.

Facing a growing chorus of angry investors, disgraced financier Bernard Madoff lost his right to leave his home Friday and was ordered to hire private around-the-clock security guards to protect him. U.S. Magistrate Judge Theodore H. Katz approved the revised bail conditions after prosecutors sent a letter requesting them earlier in the day. The letter, signed by Assistant U.S. Attorney Marc O. Litt, did not explain why the bail conditions needed to be tightened.

Madoff, 70, a former Nasdaq stock market chairman, has become one of the most vilified people in America since word broke last week that he allegedly plundered $50 billion from investors.

The changes eliminated a curfew established this week that allowed Madoff to leave his Manhattan apartment during the day. Now, he will be confined to his apartment at all times, except for court appearances.

The order calls for Madoff's wife to pay for a security firm to provide 24-hour video monitoring of Madoff's apartment doors. It also requires communications devices and services enabling the firm to send a direct signal from an observation post to the FBI if there is an "appearance of harm or flight."

"The security firm will provide additional guards available on request if necessary to prevent harm or flight," the order said.

Madoff's lawyer, Ira Lee Sorkin, said the order "speaks for itself."

About his client's safety, Sorkin said: "We are always concerned about the health and well-being of high-profile clients and we take whatever measures are appropriate."

Madoff's bail conditions have been gradually increased as angry investors who lost billions seek information about what happened to money they thought was safely invested with someone who was widely respected on Wall Street for nearly half a century. A week ago, he was released on $10 million bail only on the signature of he and his wife. When he could not get a total of five signatures on his bail package to vouch for him, a curfew was imposed.

The bail development occurred a day after Madoff was ordered to provide a written list by year-end of his assets and liabilities, a key step in finding what is left for investors.

U.S. District Judge Louis L. Stanton signed an order late Thursday requiring Madoff to provide a verified accounting of all his assets, liabilities and property to the Securities and Exchange Commission.

The court filings came as investigators spent another day trying to untangle Madoff's operation. Investigators have started serving grand jury subpoenas requiring witnesses to testify and seeking documents, according to an official familiar with the case. The official, who spoke on condition of anonymity because the investigation is ongoing, declined to identify who was served or specify what documents were wanted.

Also Friday, Tufts University became the latest group to come forward as a Madoff victim, saying it lost $20 million, or about 2 percent of the school's endowment.

The school invested the money with an investment firm called Ascot Partners LP, managed by the chairman of GMAC Financial Services, J. Ezra Merkin. Other universities also lost a bundle with Ascot through the Madoff connection, including New York Law School.

The judge's order, agreed to by Madoff, demanded details of all assets, funds or property held by Madoff and the names and locations of entities, bank accounts, brokerage accounts, investments or assets held by his business, Bernard L. Madoff Investment Securities LLC.

The order also puts control of all of his artwork, property, cars, jewelry and other items in the hands of a court-appointed receiver.

The order also requires that the receiver, lawyer Lee Richards, prevent the disposal of any of the assets of Madoff Securities International Ltd. and determine to what extent funds were comingled between Madoff's U.S. operations and any businesses overseas.

Madoff and his family essentially turned him in to authorities last week, blowing the whistle on what authorities said he confessed was a "giant Ponzi scheme."

Authorities say Madoff confessed to family members that he had for years been paying returns to certain investors out of the principal received from others until he had only $200 million to $300 million remaining.

The charge against Madoff carries a potential penalty of up to 20 years in prison. Other charges could be added as the case is presented to a grand jury.

The trustee in charge of the Madoff liquidation has hired Lazard Freres & Co. LLC to assist in the sale of the trading operations of Bernard L. Madoff Investment Securities LLC., the global financial advisory and asset management firms.

Associated Press Writer Tom Hays contributed to this report.

PlayStation Home,Sony’s PS3-based virtual world is finally live.

The free service lets gamers plug into the PlayStation Network and create avatars, living spaces and socialize. Of course, there are casual games like bowling to play, movie trailers (and eventually original series or full-length shows) to watch, and brands like Red Bull and Diesel to buy things from.

Gamers can buy clothing and accessories for their avatars and customize their “homes” with themes from their favorite games.

If Home is able to keep PS3 owners engaged beyond the initial stages of curiosity, analysts say its virtual goods sales could add millions of dollars to Sony (nyse: SNE - news - people )’s bottom line.

The open beta was announced via the PlayStation Blog today and has received tons of coverage.

nd for good reason. The long-delayed world (which was first demoed back in early 2007) has been one of the key features Sony has dangled as a reason for gamers to stick with the PS3 despite its relatively thin roster of blockbuster titles.

Too bad Microsoft (nasdaq: MSFT - news - people ) beat Sony to the (virtual) punch when it launched the new Xbox Live Experience in November—complete with customizable avatars, social features and content partnerships with Netflix (nasdaq: NFLX - news - people ) and NBCU, among others.

NEW YORK (CNNMoney.com) -- The home price plunge stayed on a record pace this summer, according to a widely watched gauge of national real estate markets released Tuesday.

The S&P Case-Shiller Home Price national index recorded a 16.6% decline in the third quarter compared with the same period a year ago. That eclipsed the previous record of 15.1% set during the second quarter.

Prices in Case-Shiller's separate index of 10 major cities fell a record 18.6%, while its 20-city index dropped a record 17.4%.

With foreclosures soaring at record rates, the economic picture dimming and job losses ramping up, all the elements were in place to push prices lower.

"The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals." said David Blitzer, Standard & Poor's spokesman for the indexes, in a press release. "All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. . . . Prices are back to where they were in early 2004."

The 10-city index is now 23.4% off its peak price, which came in June 2006; the 20-city index is down 21.8% from its July 2006 high and the national index has fallen 21% since the third quarter of 2006.

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Home prices in the 10-city index have fallen for 26 consecutive months. The decline has broadened over the past 12 months, with prices dropping in every city of the 20-city index during September.

In the weakest market, Phoenix, the 12-month loss came to 31.9%. Las Vegas prices plummeted 31.3% and San Francisco recorded a 29.5% decline. The best performing markets, Dallas and Charlotte, N.C., still posted drops - 2.7% in Dallas and 3.5% in Charlotte.

With San Francisco and Las Vegas, the other members of the 10-city index are: Miami, down 28.4% year-over-year; Los Angeles, down 27.6%; San Diego, down 26.3%; Washington, down 17%; Chicago, down 10.1%; New York, down 7.3%; Boston, down 5.7%; and Denver, down 5.4%.

In addition to Phoenix, Dallas, Charlotte and the cities in the 10-city index, the 20-city index is made up of: Detroit, down 18.6%; Tampa, Fla., down 18.5%; Minneapolis, down 14%; Seattle, down 9.8%; Atlanta, down 9.5%; Portland, Ore., down 8.6%; and Cleveland, down 6.4%.

Foreclosures continue to take a heavy toll, with sales in some cities dominated by properties repossessed by banks and then put back on the market, often at bargain prices. In Las Vegas and Cleveland, for example, about half of all homes for sale are bank-owned properties, according to the real estate Web site, Trulia.com.

"Foreclosures are clearly a part of the market now," said Blitzer.

He added that the national index price trends tend to be more moderate because they encompass many more exurban and rural areas, where, in many cases, home prices never skyrocketed as they did in some of the hotter, urban markets.

Karl Case, the Wellesley economics professor who is the Case in Case-Shiller, said during a news conference about the latest index report that he would hesitate to put a number on how much further prices could fall, but the increasing job losses will surely worsen the situation.

"There's no cushion against unemployment," he said.

And Pat Newport, an economist with Global Insight, pointed out that the latest numbers don't even capture the impact of some of the events of the past couple of months.

"The real economy took a sharp turn for the worse towards the end of the third quarter," he said. "Since then, housing permits are down, the National Association of Home Builders index of activity dropped to a record low in November and purchase loan applications were down 15%. That's telling us the housing market has worsened a lot."

Add to that a jumping unemployment rate and more bank woes and it adds up to lousy home price numbers for months to come, according to Newport.

"As bad as the latest Case-Shiller numbers appear to be, they are bound to get a lot worse," he said.

Sales of new homes fell in October to the lowest point in nearly 18 years while the median price of a new home dropped to the lowest level since 2004.

The Commerce Department reported Wednesday that new home sales decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991, another period when the country was undergoing a steep housing downturn.

The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago. It was the lowest median sales price since September 2004.

The drop in new home sales was bigger than analysts had expected and left sales 40.1 percent below where they were a year ago.

The bad news on new home sales follows other reports this week that paint a bleak picture of the housing industry.

On Tuesday, a report on home prices and downbeat earnings results from homebuilder D.R. Horton showed further deterioration in the housing market. The Standard & Poor's/Case-Shiller U.S. National Home Price Index said home prices tumbled a record 16.6 percent during the third quarter from the same period a year ago. Prices are at levels not seen since the first quarter of 2004.

Fort Worth, Tex.-based D.R. Horton Inc. reported a nearly $800 million loss in its fiscal fourth quarter on slower home sales and more than $1 billion in charges.

A report Monday showed sales of existing homes fell a bigger-than-expected 3.1 percent in October to an annual rate of 4.98 million units. The median or midpoint price for existing homes plunged to $183,000, down 11.3 percent from a year ago.

The disappointing performance for both new and existing homes showed that the country is still in the grips of a severe housing downturn.

The problems in housing have sent shockwaves through the entire economy as mounting mortgage foreclosures have cost banks billions of dollars in loan losses, creating the worst financial crisis to hit the country in seven decades.

President-elect Barack Obama has said Congress should begin working on a sizable stimulus program even before he is sworn in on Jan. 20, with the goal of creating 2.5 million jobs over the next two years to keep the economy from falling into a prolonged recession. The housing industry also is appealing for help from the new administration.

The report on new home sales showed sales were down 18 percent in the West and 6 percent in the South.

Sales posted a 22.6 percent increase in the Northeast and were up 6 percent in the Midwest.

The drop in sales pushed the inventory of unsold homes up to 11.1 months, meaning it would take that long to exhaust the stock of unsold homes at the October sales pace.

Builders, who have been slashing production in an effort to get control of inventories, are being faced with soaring mortgage defaults which are dumping more unsold homes on an already glutted market.

The National Association of Home Builders reported last week that its survey of builder confidence fell to an all-time low of 9 in November, down from 14 last month. Index readings higher than 50 indicate positive sentiment about the market. But the trade group's index has drifted below 50 since May 2006 and below 20 since April.

The housing slump already has cost the country 3 million jobs in construction and related industries, and the home builders are urging Congress to help with increased support for the industry.

Tighter lending standards, rising defaults and fear about the housing market's future have sidelined buyers, an absence felt acutely by homebuilders such as Pulte Homes Inc. and Centex Corp.

Top Story

Massive fiscal stimulus could wind up creating jobs offshore as funds are spent on imports

• Plus: Obama Names Volcker to Economic

President-elect Barack Obama has made a promise: to save or create 2.5 million jobs over the next two years. Estimates of the cost of his high-powered spending program to rescue the U.S. economy start at $500 billion and go way up from there.

But a giant issue lurks: How much of Obama's mammoth fiscal stimulus will "leak" abroad, creating jobs in China, Germany, or Mexico rather than the U.S? This is a question with big economic and political implications—and no easy answers.

One problem is that over the past 25 years the U.S. has become the "consumer of last resort" for the world economy. Imports have risen from the equivalent of 9% of gross domestic product to almost 19%. Even more astonishing, the value of imported goods now is equal to almost 40% of the output of U.S. manufacturing. For some types of consumer goods, such as clothing and consumer electronics, it's increasingly difficult to find items that were not made abroad. As a result, fiscal stimulus that boosts consumer spending in the U.S. may be diffused through the global economy, reducing its impact on jobs here.

At the same time, Obama will face intense political pressure to make sure his intended spending on infrastructure, health-care modernization, and green technology creates manufacturing and service jobs in the U.S. Federal procurement is already governed by a complicated welter of laws mandating minimum "domestic content" for many types of federal purchases, including the Depression-era Buy American Act. That's why, for example, steel for federally funded transit projects typically has to be made in the U.S.

No Sideshow

The scale of the fiscal stimulus will likely ensure a frenzy of lobbying to tweak the existing domestic content rules and add new ones. But the more rules and earmarks that are built into the package to ensure domestic jobs, the more expensive it will get and the more the U.S. will look as if it's retreating from free-trade policies. "Job leakage will continue," says Susan Houseman, a senior economist at the W.E. Upjohn Institute. "For better or worse, Obama and Congress will be under tremendous pressure to plug that leak."

The coming debate over "Buy American" restrictions in the fiscal stimulus is no sideshow. The financial crisis was caused, in large part, by U.S. consumers borrowing trillions of dollars from the rest of the world to buy imported cars, clothes, and gasoline, even as jobs slipped overseas. As long as the U.S. is running a big trade deficit and borrowing from abroad, a fundamental cause of the crisis remains.

Now, whether Obama's stimulus package creates 2.5 million jobs or not, economists believe it is a good idea, given the ferociousness of the downturn. "Without it, you could get a protracted period of negative or weak growth," says Nariman Behravesh, chief economist of IHS Global Insight in Lexington, Mass. "With it, you could get the economy coming out of recession in the third quarter" of 2009.

Vanishing Factories

Yet given the U.S. appetite for imports, hitting the Obama jobs target will be tough. When President Ronald Reagan cut taxes during the deep recession year of 1982, the U.S. was still a relatively closed economy. That meant when consumers started spending, the jobs showed up in this country.

Over the past 10 years, however, the number of manufacturing jobs in the U.S. has plummeted, going from 17 million in 1997 to 13 million today. The part of the Obama plan that props up consumer spending will not bring back those lost factory jobs.

In fact, Obama does aim to get money into the hands of consumers, through extended unemployment benefits and aid to state and local governments that might otherwise lay off workers or raise taxes. J. Fred Giertz, a state budget expert at the University of Illinois at Urbana-Champaign, notes that in 2003, $20 billion of federal assistance was allocated to states, with about half earmarked for Medicaid. How much this time? "Something in the range of 5% to 10% of the stimulus package would be a good guess," says Giertz.

The advantage of these types of spending is that they are fast-acting. The disadvantage: They support the same "U.S. as consumer" mentality that got us into trouble in the first place, along with purchases of imports.

What about spending on infrastructure, health-care modernization, and green technology? All these tend to produce less leakage overseas than consumer spending. But even jobs in these areas have a tendency to slip over the border unless carefully constrained. Spending on infrastructure such as rail transit is more likely to create domestic jobs, in part because it is already covered by federal legislation that mandates a certain level of purchases of U.S.-made goods.

For example, new public transit vehicles generally must have 60% domestic content and be assembled in the U.S. Electric streetcars—a mass transit option to cut pollution that's favored by cities such as Denver and Salt Lake City—would likely be imported from other countries if it weren't for the "Buy American" requirements attached to federal funding.

Fire officials say wind of "near hurricane force" has grounded some of their water-dropping aircraft as they battle a wildfire that has burned at least 10 homes and forced thousands of people to evacuate in northern Los Angeles.

The California Highway Patrol has shut a second freeway in the area.

CHP officer Patrick Kimball says a section of Interstate 5 near Sylmar was shut early Saturday as flames spread west toward the freeway.

About 5,000 residents have been evacuated since the fire started late Friday, and authorities say more evacuations are under way. Patients at one hospital were evacuated when the blaze knocked out power.

A separate fire in the Santa Barbara community of Montecito had forced evacuation of more than 5,400 homes since it started Thursday.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

It's a tradition that may not rank with the passing of secret nuclear-launch codes, but the White House visit by Michelle and Barack Obama was no less freighted with significance. "They will literally become living symbols of the country to the world, for all of history," said Carl Sferrazza Anthony, who has written several books about first ladies. "It will redefine their identities."

Michelle Obama had already made clear that her first priority will be smoothly settling her daughters, Malia, 10, and Sasha, 7, into this new life. She squeezed the White House visit in between trips to the private Georgetown Day School and Sidwell Friends School.

The transition team and staff at both schools in the District refused to discuss the visits. So it fell to a 10-year-old boy, Nicolo Pisoni, to offer on-the-record confirmation of her trip to Georgetown Day's campus on MacArthur Boulevard.
 

"I thought it was awesome because I saw the future first lady," the fourth-grader said. "I got really excited, but we weren't supposed to get excited. Not out loud. Our teachers told us not to get excited but to show Michelle it was a regular school day and that we aren't crazy kids. They didn't want us asking her for her autograph."

Isabel Dorval, a 10th-grader at Sidwell, said she was running on the field at the middle/upper school campus on Wisconsin Avenue a little after 4 p.m. when a convoy of cars arrived. About 45 minutes later, the motorcade drove off as Sidwell students waved. Michelle Obama rolled down the window and waved back: "It was cool," said 15-year-old Isabel.

Past presidents have sent their children to both public and private schools. But sources familiar with the process say they expect the Obamas to select a private school, where tuition for both girls would total more than $50,000 a year. The girls attend a private school now near their Chicago home, and Michelle is on the board of trustees.

As is customary during transitions, the outgoing first lady led her successor on a White House tour that focused primarily on the upstairs private residence, including three bedroom suites and three living areas. These areas, along with the Oval Office, are subject to redecoration, as opposed to the public rooms. A stop on the tour always of particular interest, Anthony said, is the first lady's sitting room, whose windows afford a direct view of the Oval Office below: "She can really keep an eye on who's coming and going, who's meeting with the president."

Michelle Obama and Laura Bush also spent time discussing "raising daughters in the White House," Stephanie Cutter, the Obama transition spokeswoman, said in a statement. "Mrs. Obama was honored to finally meet the First Lady, who was a gracious hostess." It was Michelle's second visit to the White House -- she was there once before with Malia and Sasha around the time of her husband's swearing-in to the Senate.

On MSNBC, Anita McBride, Laura Bush's chief of staff, said the first lady showed Michelle Obama where the Bush daughters, Jenna and Barbara, lived.

"She thought the rooms were beautiful and would be perfect for her two little girls and that they could decorate in a way that would be appropriate for young children," McBride said. "And it is a historic room. The Kennedy children lived there. The Johnson girls lived there, Chelsea Clinton as well . . . and Amy Carter."