From The Business Online:
Fears as US house prices to dip for the first time ever
HOUSE prices are set to drop in the US for the first time on record, US investment bank Goldman Sachs warned this weekend.
Prices in several segments of the market have already started to fall, and the overall market will move into the red even in nominal terms next year, fuelling fears that this will trigger a downturn in consumer spending and hit an already slowing US economy.
Jan Hatzius, economist at Goldman Sachs, said: “The risk is rising that nominal US home prices may be headed for an outright decline in 2007. It would be the first decline in national home prices ever recorded, at least in nominal terms.”
In real terms, prices have declined during several periods, including a 9% drop from 1979 to 1984.
In a special analysis of the data, the Goldman economists found that seasonally adjusted US house prices were already falling in dollar terms. The nominal median price of a single-family home has been declining slightly at a 1% annualised rate since the fourth quarter of 2005, the research shows.
The median price of a condo or co-op apartment has been falling more steeply at a 9% annual rate. Hatzius said: “It is not surprising to see relatively greater weakness in the condo and co-op market, which is much more concentrated in overheated coastal parts of the United States”.
COOLLAPSING Home Prices!
It has happened before and is happening NOW!
This one is the biggest bubble of the bunch so prices have mor edownside than last time. 1990-1994. 50% condo drops 25% house drops. Expect more house downside this time around.
Interest rates on 30 year Mtg up about 25-30% last 12-18 months. Grubbers do not care if you are a debt slave. Go ahead sign up for slavery. You’ll find out it ain’t so fun and that Dream boat house will be a nightmare to upkeep.
Bababababa
Bust!
Bob
BOOOOOOOYAAAAAAAAA
Grim, I’m confused. This article is saying that this is the first drop ever?
We all know that’s not true, so what’s the deal?
I believe Calculated Rick has your answer.
Err, that’s Calculated RISK.
“Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.”
Former Fed Chairman Paul Volcker, Feb 11, 2005