Home Prices Fell in ’07 for First Time in Decades

[MichaelC 160]

http://www.nytimes.com/2008/01/24/business/24cnd-home.html

 

Home Prices Fell in ’07 for First Time in Decades

By MICHAEL M. GRYNBAUM

It was a notable year for the housing industry, and not in a good way.

 

In 2007, the median price of an American single-family home fell for the first time in at least four decades, according to the National Association of Realtors, a trade group.

 

The median price declined 1.8 percent to $217,800, the first annual decline since reliable records began in 1968. “It’s the first price decline in many, many years and possibly going back to the Great Depression,” said the group’s chief economist, Lawrence Yun.

 

Over all, sales of previously owned single-family homes fell 13 percent in 2007, the biggest drop in a quarter-century. Last month alone, home sales dipped 2.2 percent from November, to a 4.89 million annual rate. (The group’s survey excludes newly constructed homes.)

 

Inventories of single-family homes and condominiums remain elevated, as the housing industry struggles to climb out of its worst downturn since the early 1990s. Though the backlog of unsold homes ticked down slightly in December, at least one economist attributed the drop to discouraged homeowners “pulling their homes off the market in the face of continued weak demand and falling prices.”

 

“We still have a long way to go before prices sink to levels necessary to balance supply and demand in the housing market,” the economist, Joshua Shapiro of MFR, a research firm, wrote.

 

Potential home buyers have stayed on the sidelines as they expect prices to drop further in 2008. Economists predict the housing market will not bottom out until the summer, and even then will remain sluggish.

 

The median price of a previously owned home was off 6 percent last month from December 2006, and sales of condominiums fell 25 percent.

 

The steepest decline in sales last month came in the Northeast, where sales fell 4.6 percent from November. Prices in the region were down 8.9 percent from December 2006.

[phil43 0]

Actually, I don't think prices will bottom out until at least 2010, not sooner. The market peaked in 2005 when when they were still issuing "liar loans" and 5 yr int. only ARMS with piggy-back loans.

 

Phil

[Doug Pretorius (ON) 9]

One of the things they always ignore in these "predictions" is that after prices fall they usually plateau for a few years, they don't start going back up immediately.

 

My parents bought a house for $166k in 1988. Our market only declined about 10% in the recession of the early 90s, and yet it took 10 years for their house to get back up to what they paid for it.

 

There is such a thing as a balanced market where neither buyers nor sellers have the upperhand. We will probably have several years of that kind of market before the next upswing.

[<Steve> 82]

Potential home buyers have stayed on the sidelines as they expect prices to drop

I spoke with a fella at the bank (a banker) today who has been ready to buy/build a house. Sold his house last year, and has the cash and credit. And he's down in the mouth. Saying that the "experts" say prices are going to start dropping here too. ???? (I am in area that was flat during the boom)

 

Well, if it hasn't started yet. . . so what

 

Now is the best time to build that house or do the big ticket stuff, get into good debt!!!!!! Hello! Sweet deals can be made. Intrest rates 5.75% what are you kidding!!!

 

It's the thinking of some/many, "the side liners" that will keep things the way they are. It is going to take a different economic boom to bring those off the side lines. And it sure as hell ain't coming form any of today’s line up of politicians! The 'side liners' are going to just have to wait.

 

Sorry. For me I am not participating in the side line blues. This year is going to even better than last year and last year blew me away! Hope yours is too!

[-Tony- 0]

Okay, like I always say the glass is half full..... I don't know exactly know how the NAR gets their # but it sounds like add all the houses up and divide by that number......right

 

Well in my area SE Virginia all of the upper end houses (>450) are not selling but, the moderate income houses are (<250k) the lower the price the faster the sale and I talking fmv not just bailing out (250-450 are slow). So, my point is IN MY AREA without the big ticket houses selling, it would give the perception of the median house price falling...... IMHO