Here's a bit of bad news: US home prices had their biggest drop on record.
Let's look at the numbers.
- The median home price fell 14% to $169,000.
- Prices dropped in 134 of 152 metropolitan areas.
- Distressed sales increased in 17 states as speculators and first time home buyers moved in to buy.
- Distressed homes sold for 20% less than others.
- The inventory of previously owned homes dropped to 3.7 million in March from 3.8 million a month earlier.
- The number of new homes for sale fell to 311,000, that lowest level since January 2002.
- Total existing home sales fell 6.8% from a year earlier to a seasonally adjusted rate of 4.59 million units. Sales were down 3.2% from the fourth quarter.
- The steepest price decline was in Cape Coral-Fort Myers Florida, followed by Michigan down 54%, then Ohio down 48%, San Francisco down 43%, and San Jose California down 43%
- The largest sales gain was in Nevada up 117%, then California up 81%, Arizona up 59% and Florida up 25%.
What does all this mean? What it seems to show is that we have two housing markets, one for distressed sales and the traditional market. The action we are seeing is in the distressed sales area. As we said previously, speculators and first time buyers are carrying the market. Also pushing sales is the fact the mortgage rates have dropped to 4.84% last week, down from 6.05% a year earlier.
For all of 2009, sales of existing homes are likely to reach 4.97 million up from 4.91 million last year.
Have we reached bottom in the housing bust?
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Reader Comments (Page 1 of 1)
5-12-2009 @ 9:53PM
william lindblad said...
You could ask Roubini and Schiff and I am sure they would say no. I say maybe, depending on what is still out there. Many months ago I said that we would hit bottom around June of this year and by that I meant that all the bad news would either be well known or highly suspected. I also have been repeating for months that every economic in U.S. history, with the exception of the oil embargo years, has had some kind of bad natural event to accompany it.
What I am saying is simply this - Katrina hit in Good times and it was a substantial impact. If something similar happens in bad times? This is not about damage, insurance claims, personal calamity and sheer cost, both in dollars and human suffering, but in how it can effect an entire economy. Katrina damaged the port of N.O., damaged oil rigs and pushed the price of fuel. Everyone felt the wind blow in one way or another. In the 30's it was the dust bowl which effected the food supply. The old farmers almanac predicts that this summer will be the hottest in over 100 years. Soon we get to find out. If they are correct and it is also the driest - it will be sure to impact everthing.