Thursday, April 24, 2008

Home Prices: Down 13.3%

In case anyone is not a believer, the statistics firmly demonstrate that home prices not only go up. They can also go down – sharply – in short periods of time. The median price of a home sold in March dropped 13.3 percent when compared to one year ago. This is one of the largest declines ever, exceeding even the 14.4 percent drop in July 1970 when the U.S. was buried under high interest rates and stagflation.

The sales of new homes in March dropped to the lowest level in 16 ½ years, the slowest pace since 1991. The early part of the 90s was not merely memorable for outlandish music videos on MTV but for the S&L crisis that left many sub-divisions incomplete and housing market in absolute chaos. Having a housing market with lower sales then one of the worst real estate periods in recent memory can not be considered a positive sign. Not even NAR (National Association of Realtors) could spin this as good news.

New home sales plunge to lowest level in 16 1/2 years
New home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years