From the AP:
Housing slowdown may cause price drops
By MARTIN CRUTSINGER
Housing prices, slumping after a five-year boom, are projected to decline in half of the nation’s metropolitan areas, with the Northeast, Florida and California among the areas hardest hit.
The forecast by Moody’s Economy.com, a private research firm, presents one of the starkest views yet of the housing slowdown that has been gathering force in recent months.
The West Chester, Pa., forecasting firm projects that the median sales price for an existing home will decline in 2007 by 3.6 percent, which would be the first decline for an entire year in home prices since the Great Depression of the 1930s.
The forecast is included in a 195-page report, “Housing at the Tipping Point,” which The Associated Press obtained before its general release on Wednesday.
The report projected that 133 of the nation’s 279 metropolitan areas would suffer price declines. That is quite a contrast from the past five years when low mortgage rates pushed sales to five consecutive annual records and prices in the hottest sales areas skyrocketed.
But this year, the once red-hot housing market has cooled significantly. Some analysts are worried that the slowdown could become so severe that it could drag the entire country into a recession, much as the bursting of the stock market bubble in 2000 led to the 2001 slump.
…
“Prices are going to go down and stay down for awhile. It will take at least a couple of years to work off the excesses of the last decade,” said Mark Zandi, chief economist at Moody’s Economy.com and the principal author of the report.
JB, any comments on this? Perhaps we can take a look at median vs average price again. 3.6% is no big deal, perhaps you can add some of yoru wonderfule insight to this. Thanks.
Hopefully, we’ll be able to get our hands on that the report tomorrow.
jb
So they forecast the first national median drop since the Great Depression but they won’t call it a crash. LOL!
You gotta love when they say the “Median Home Price” will decline bla bla bla. So many sellers think oh ok my
300K dollar house that when fair market value should be around 170K think it will only drop 3.6% LOL
Try more like 36% fools
As a potential buyer I have been reading this blog for awhile and one thing is fairly obvious;
Whenever any bit of news offers the slightest bit of a contrarian (or even a not so drastic crash, crash, crash) view, most people on this blog start with their conclusory rants. If they cannot reconcile a fact with their real estate paradigm they stop thinking about the information and launch into name calling mode.
MM:
If they cannot reconcile a fact with their real estate paradigm they stop thinking about the information and launch into name calling mode.
I have been following the market for over 2 years. I have read every article I can about the bubble.
Let see common sence tells us
1> Mortage companies invented “Scam Loans” so people could keep up with the market
2> Housing prices have dropped in areas 55K and yet people in the same town think they can still charge obscene prices hence they are Fools.
3> Real estate agencies are so desperate to sell properties they are playing the relist game.
etc on and on
So do not make some half wit comment that a 2 year old would make. ooh you call them names. I have been following the NJ market proabably much longer than you, so yes I can make comments and call people fools. I do not just read one thing and base my comments from just that.
So why not next time post something intellient on this site, like everyone else on here instead of trying to sound like you are a harvard graduate.
MM,
I was a contrarian in 2005. I’m still waiting for someone to convince me that it makes economic sense, at this time, to purchase rather than rent in NNJ. For your analysis,I took my RE equity off the table and interest from this is paying my rent. If past history of this market(1900’s-2000) is not a better indicator than 2001-2005,then maybe we have entered a new RE paradigm. I don’t think so. I’ll take the previous 100 years, with the past 4 being an anomaly. No ranting here, I’m all ears waiting for a buy/rent analysis from anybody, in favor of buying at this time.
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