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Good News, Bad News for the Housing Market

by BigT | May 27, 2008 at 01:38 pm | 117 views | 1 comment

First, a story about how the price of homes in America have fallen, sharply.

U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday, a somber indication that the housing slump continues to deepen.
Standard & Poor's/Case-Shiller said its national home price index fell 14.1 percent in the first quarter compared with a year earlier, the lowest since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.

Prices nationwide are at levels not seen since the third quarter of according to Maureen Maitland, a S&P vice president. However, the index is still up 60 percent versus 2000.

I know things aren't good right now, but we're up 60% since 2000. Can it be all that bad?

And here's another story about how sales of new homes have actually increased month over month from March to April.

Sales of new homes across the United Statesrose an unexpected 3.3 percent in April from the prior month, to aseasonally adjusted annual pace of 526,000 homes, a government reportshowed Tuesday.
The spike in sales confounded most economists forecasts of a sales decline last month.

New home sales in March, however, were revised lower to 509,000properties compared with an initial tally of 526,000, according to theCommerce Department survey.

Although activity rose over themonth, sales of new homes in the 12 months to April have dived a hefty42 percent in the midst of a persistent housing market slump.

Turnover of new homes has fallen steadily in the past two years,excepting some month-on-month gains, amid one of the worst US housingmarket downturns in decades.

All I know is that a couple of years ago me and many others were thinking it would be impossible to buy a home in SoCal. And that was a bad thing. Now home ownership is leaving the realm of fantasy and actually coming into focus a little bit. But that's really bad for most people because it means they have lost what probably amounts to most of the equity they have built up over their life. All I know is that there are cycles in the market and that before another decade speeds by I will be writing about increasing housing costs. Well, probably. BigT

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Barry Artiste

at 19:45 on May 27th, 2008

good stuff:

BigT, I like this story. It's good stuff.One wonders if Canada will be a casualty of inflated pricing too.

Seems the media are kowtowing to Realtors "fear mongering" to prospective home buyers who cannot afford a home in BUY NOW, they ain't making anymore land? Thus putting new homebuyers in debt with unheard of 40 year mortgages. But then I realise Media rely on Realtors for their bread and butter through newspaper advertising, which amounts I am sure to millions, hence the quandary why they salivate over anything Real Estate orientated by them to publish in their papers.

By the way Big T, someone here published John Waynes 101 anniversary, in case you are interested. Its good stuff too.