US Housing Prices Continue Falling

[MichaelC 160]

Housing Prices Falling; Is The Sky Next?

 

Forbes.com

U.S. Home Prices Tumble

Maurna Desmond, 04.22.08, 12:32 PM ET

 

 

The sky isn't falling but home prices are, and the plunge in the value of U.S. homes combined with tighter mortgage-lending standards is making Americans even more reticent about buying.

 

On Tuesday, the National Association of Realtors reported a worse than expected 2.0% drop in sales of existing single-family homes and condominiums in March to a seasonally adjusted annual rate of 4.93 million units compared to February. Compared to a year ago, sales were off 19.3%. The median price of a home sold last month dropped to $200,700, a decline of 7.7% from the median price a year ago.

 

Joseph A. LaVorgna, chief economist at Standard & Poor's said in a note to investors Tuesday that falling home prices aren't such a bad thing, "On one hand they are causing negative wealth effects and forcing some new mortgages underwater; but on the other hand, this is a necessary, albeit unpleasant, prescription for restimulating housing demand," he said.

 

Sales were expected to drop 1.6% to a seasonally adjusted annual rate of 4.95 million units, down from 5.03 million in February, according to the consensus forecast of Wall Street economists surveyed by Thomson Financial.

 

Lawrence Yun, the chief economist of the National Association of Realtors, said that a tightening of lending practices was stymieing some home shoppers, counterbalancing relatively low mortgage rates. "At the same time, many buyers continue to bide their time with a large number of homes to chose from, while other potential buyers remain on the sidelines."

 

February homes sales were down nearly 24% from a year earlier. Sales of existing homes fell nearly 13.0% in 2007 to 5.65 million, the biggest decline in 25 years. The median sales price for single-family homes and condominiums dropped 8.2% in February from a year ago, settling at $195,900. The median price for single-family homes was down 8.7% from a year ago, the biggest decline in four decades.

[phil43 0]

I read another article by that suggests housing prices could fall more than the 30% drop experienced during the Great Depression! Yikes!

 

Phil

[Dustin 0]

I see this would concern some people... but it doesn't make me worry. Thats what I love about REI is that national trends actually help you make more money if you can spot the opportunities out of the market changes.

[randian 0]

I read another article by that suggests housing prices could fall more than the 30% drop experienced during the Great Depression! Yikes!

Nationally, I very much doubt it. Regionally it's quite likely. It happened in California in the late 80s/early 90s. Curiously, at the time nobody was whining about "great depression".

[-Tony- 0]

Nationally, I very much doubt it. Regionally it's quite likely. It happened in California in the late 80s/early 90s. Curiously, at the time nobody was whining about "great depression".

or we just didn't hear about it, comunication then and now are totaly different. It isn't like the web, if you didn't have friends or family in another state you didn't know what was going on, unless it made national news. Which nat' news only had like 15 min. On the other hand with the web I can chat with someone in CA or around the World and get whatever info I am looking for.

[<Steve> 82]

The median sales price for single-family homes and condominiums dropped 8.2% in February from a year ago, settling at $195,900.

So does it seem that the inflated 'Boom' prices are now completey deflated and prices today are more realistic? I am not sure what the median house is as far as square footage and amenities, but it seems that the cost to build a median house with a little profit is going to be greater than what they can sell for. And if the price drop continues through 2009, housing will be way under valued.

[Dan (SoCAl) 0]

Lawrence Yun, the chief economist of the National Association of Realtors, said that a tightening of lending practices was stymieing some home shoppers, counterbalancing relatively low mortgage rates.

Boy, no kidding. I spoke with a southern California mortgage broker this afternoon, 15 years experience, who is working with a married couple looking to buy. They both have FICO scores over 800 and 30% cash down, but need to go no-doc. She cannot get them financed. WTF??!

 

I am so leaving this state.

 

Dan

[phil43 0]

Lawrence Yun, the chief economist of the National Association of Realtors, said that a tightening of lending practices was stymieing some home shoppers, counterbalancing relatively low mortgage rates.

Boy, no kidding. I spoke with a southern California mortgage broker this afternoon, 15 years experience, who is working with a married couple looking to buy. They both have FICO scores over 800 and 30% cash down, but need to go no-doc. She cannot get them financed. WTF??!

 

I am so leaving this state.

 

Dan

 

And they wonder why people aren't buying! They can lower interest rates all they want, but that does little good if the qualifying criteria is next to impossible

[MichaelC 160]

Lawrence Yun, the chief economist of the National Association of Realtors, said that a tightening of lending practices was stymieing some home shoppers, counterbalancing relatively low mortgage rates.

Boy, no kidding. I spoke with a southern California mortgage broker this afternoon, 15 years experience, who is working with a married couple looking to buy. They both have FICO scores over 800 and 30% cash down, but need to go no-doc. She cannot get them financed. WTF??!

 

I am so leaving this state.

 

Dan

Dan, I find that impossible to believe. 800 FICO's, 30% down, and they can't qualify?! If true, then let it be said that mortgages no longer exist and homes purchases will now be cash and carry only. Unreal.

If you do leave CA, don't forget to update your screen name. Dan (Fargo) sounds odd, but I guess I'll get used to it.

[randian 0]

Dan, I find that impossible to believe. 800 FICO's, 30% down, and they can't qualify?! If true, then let it be said that mortgages no longer exist and homes purchases will now be cash and carry only. Unreal.

If you do leave CA, don't forget to update your screen name. Dan (Fargo) sounds odd, but I guess I'll get used to it.

It's the No Doc part that's killer. Mortgage brokers I talk to say nobody is underwriting No Doc, no matter what your FICO or down payment is.

[GetErDun 0]

Crazy what is happening out there! I remember 5 years ago in CA trying for a stated income and they only asked me to show merchant acct statements to prove what was invoiced monthly... 650 fico 5% down! Today, wow, 800+ scores, 30% down and no loan. Thats nuts!

[<Steve> 82]

Forget banks...owner finance!

[MichaelC 160]

Forget banks...owner finance!

Forget owner finance. . .all cash for .40 on the dollar!