CNN (oh we love CNN) is reporting that home prices have experienced the worst drop in 37 years, and the pace of sales has fallen short of forecasts by experts.
The report showed that the median price of a new home sold in October plunged 13 percent from year-earlier levels to $217,800. It was most severe year-over-year drop since September 1970, when the median price was only $22,600, or less than the cost of a typical new car purchase today.
Thirteen percent may seem like big drop, however when compared to the exponential increases in values we’ve seen over the past several years, we can see why the sales volume still fell far short of the forecasts. That measly thirteen percent drop still keeps most prices out of reach of the typical buyer, especially with the limited availability of subprime and other nontraditional mortgages.
Thursday’s report is only the latest sign of weakness in the housing market. On Wednesday, a separate report by the National Association of Realtors reported the weakest sales of existing homes on record despite the largest drop in prices ever.
Well now that we’ve seen the worst price drop in 37 years and the weakest sales of existing homes on record, we must be at or near the bottom!
Being at the bottom or near it would be a logical prediction, however, what happens if/when the bottom drops out?!? Even with median home values near $200,000, energy costs will plague those with limited incomes. Eventually everything will balance out. Unfortunately, not all is equal. With so much speculation regarding utilities, oil, inflation, regional problems(i.e. natural disasters), political issues, and global tensions, the future does not look so good.
By the way, I just heard that crazy Berny is going to lower rates again. Well, its about time. It’s been how many weeks since the last cut? Oh U.S. currency, how much weaker can you get? I think we should go back to using gold medallions.
Gold medallions.. on chains around our necks!
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