From Pine View Farm

Home Prices: Sinking to Where They Belong? (Updated) 0

Note that almost half of these sales were “distressed“:

Prices of existing U.S. single-family homes dropped a record 12.4 percent in the fourth quarter from a year earlier to the lowest level since 2003, the National Association of Realtors said on Thursday.

The NAR said distressed sales, which includes foreclosures, accounted for 45 percent of transactions in that quarter, dragging down the national median price of existing single-family homes to $180,100.

I suspect the sellers were also distressed, worrying whether their vehicles are big enough for their families to live in.

Prices may be close to bottoming out; the early 2000s was apparently when the just-busted bubble started to inflate (see graph here).

Criswell predicts that prices are going to stay flat for a long time. Persons fearing pay cuts and unemployment do not buy houses. Or cars. Or washing machines. Or anything they don’t have to have.

Addendum, Later That Same Day:

Atrios thinks that housing prices will slide significantly further.

He’s got a Ph. D. in economics and has taught in some of the finest universities in the world.

I don’t have a Ph. D. and have taught persons how to carry trays in dining cars.

We will see if my “it’s not rocket science” contention holds up.

If it doesn’t I will forget about this update.


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