Existing-home prices fall for 1st time in 11 years

[UpInArms]

http://www.marketwatch.com/News/Story/Story.aspx?guid={32209313-C23C-4946-B9B5-5392D6499D24}&siteid=mktw

WASHINGTON (MarketWatch) - Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 38 years, the National Association of Realtors said Monday.

Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said.

Sales have fallen five months in a row and in nine of the past 12 months. Sales are down 12.6% in the past year. It's the lowest sales pace since January 2004.

The median price of an existing home fell 1.7% year-over-year to $225,000. It's the first time since April 1995 that median prices have fallen on a year-over-year basis. It's the second largest decline in the 30-year history of the realtors' survey, exceeded only by a 2.1% drop in November 1990.

<snip>

Inventories of unsold homes rose to 3.92 million, a 7.5-month supply at the August sales pace, the most since April 1993.

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[Zynx]

1. Score! I won a bet that prices would post an overall decline and not

just a slowdown.

On a real level though, without any price appreciation, people can't keep sucking money out of their homes to finance current purchases so this is very bad news indeed.

[filer]

2. Or perhaps it's good news.

People need to begin exercising some fiscal discipline and attempt living within their means. Home equity loans should not finance current purchases. It's a recipe for eventual bankruptcy, and the new laws aren't friendly.

[ItsTheMediaStupid]

5. It reflects how weak the economy actually is.

There are some people doing well. There should be many more.

With the defecits we are currently running, annual GDP growth should be through the roof and everything should be inflating, including houses.

These numbers show a very narrow economy, with a few doing incredibly well, a few more keeping up with inflation and the majority getting screwed as good jobs leave the country.

[formercia]

3. Let's see who gets caught without a chair

when the music stops.

[physioex]

4. I think that is the best explination....

I've heard on this situation.... :)

[Gregorian]

7. Please don't say that. I'm just getting up.

I have always used the musical chairs metaphor for real estate.

I've been going from place to place, trying to find a home. Each place is destroyed. Whether developments, or forest destruction. I'm enraged. I have gone through about six properties. And here I sit on one of the most beautiful properties on earth, and it's up for sale. There is absolutely nothing on the market that has my very narrow criteria.

I'm about to be chairless. But of course, this is far from being homeless and broke. I'm just very angry that the world decided to populate, procreate itself to death. I just wanted privacy and beauty. Now a million bucks won't buy it.

[formercia]

8. You can bet

it won't be the guy controlling the music.

I know what you mean. We live within a couple of miles of the Maine coast. Waterfront property is going through the roof. Luckily, my wife works within a 5 minute walk of Acadia National Park. What a gem.

I do have to thank all of the rich people on Mount Desert Island, including the Rockefellers, for donating all of the beautiful property to the park.

[BlueJackal]

14. That's another great anology.....

Anybody else think maybe some of these Bilderberger banker types might be behind this real estate insanity?

[formercia]

16. Make a lot of capital available at low interest rates

then make it scarce and foreclose on the bankrupt homeowners when their ARM goes beyond their ability to pay. Convert paper into tangible property.

[Name removed]

20. Deleted message

Message removed by moderator. Click here to review the message board rules.

[formercia]

21. I don't think it's a new idea

I think big money movers do it all the time, in various markets.

[earth mom]

10. I think all real estate is overpriced.

When I see what some of the prices people pay for their homes I'm shocked. I think we all have narrow criteria as to what we want whatever our price range, but the problem is that everything from run down shacks to ugly McMansions to acerage has become so overpriced to be ridiculous. It has become near impossible to get "value" for your money anymore-those days are long gone.

I too, want beauty and privacy but at a third or quarter of the price that you are willing to pay, since I'm talking about a few acres, nothing fancy here, just a bit of beauty and privacy. However, I have looked and looked and found that most property I would consider moving for is WAY overpriced and ultimately out of my price range. :(

[BlueJackal]

13. Damn good explanation.....

I can also think of another one:

Don't be the bitch who catches the hot potato last because he/she gets their hands burned.

[barb162]

18. the middle class

[Gregorian]

6. Inventories are HUGE!

Those who don't have to lower their prices won't. People are not anxious to lose money. That means it will be a slow process. Except for those who are forced to sell. Those who are out of cash; Those who have mortgages. And that is a big section of this country.

I'm watching for a special kind of property. And it seems to be totally unaffected by this present downturn. I see huge inventories coming up. But almost nothing in the higher range.

I see this, once again, as an indicator of who has the money. The many, the vast majority of this country, is starting to feel the heat. (Hell, I don't even know how some of these fool pay property taxes. What a sham, paying ten grand a year. The counties of this country must be bathing in money.) But the rich are not putting their properties on the market. I don't see any special properties.

This is my observations of the Northern California market. An area with almost no jobs. A high end area. A rural area.

[truthisfreedom]

9. the bushco economy... crapola.

just in time for the elections.

[BlueJackal]

11. It doesn't mean shit

They showed the graphs on CNBC the other week and the fall means nothing. If you look at the price now and the price 6 years ago it's at least 5 times higher. A small drop will do nothing except help "poor millionaires"(those with under 3 mil in total assets) get houses easier but for the rest of us 90% or so of the country it means nothing.

[Lars39]

15. Not buying that.

Small town/small town housing prices are being effected also. 'new prices', 'just reduced' and 'newly priced' featured heavily among the realty ad language I saw Sunday.
And these were for houses ranging from $44K to $140K.

[moondust]

12. Uh oh. The leg is collapsing.

Can the Bush economy levitate?

[Demeter]

17. Yup! It's Morning In America, Again!

The Reagan Economy (no barfing, please) is back, in a new, improved, far more lethal form. Idiots!

[NOLADEM]

19. First of many such quarters to come...welcome to stagflation

This is the first of many solid, undeniable indicators that stagflation is moving into place.

[catmandu57]

22. Well the dump next door is up for sale...again

It's a slumlords dream, a rental property that the last owner paid way too much for, and has let fall into disrepair, the grass was cut twice this year, you could lose a small child over there.
Houses are going up for sale all over town I counted 15 in a mile radius of here, we're not that big of a town either about 5500 people, most of them are for sale by owner.
Either this place will be forclosed on, or they'll take a bath trying to get rid of it, the way it looks now the best thing to do would be just to buy the place tear down the house and rebuild.