Prices are going to fall even further, foreclosures have yet to peak and prices of houses still have to come down 25% to as much as 40% to mark something close to a bottom, be patient, in another 2-3 years when you buy your 1st or 4th house you will probably find a bottom in housing, until then sit back and wait. New home sales plummet in August, prices tumble By MARTIN CRUTSINGER, AP Economics Writer 17 minutes ago WASHINGTON - Government data show sales of new homes dropped sharply in August, falling to the slowest pace in 17 years. The average sales price fell by the largest amount on record, too. The Commerce Department said Thursday that new homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991. It was a much bigger sales decline than the small 1 percent drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8 percent to $263,900, compared to the July average of $299,100. The median price was also down, falling 5.5 percent to $221,900.
Yes, still way too many houses. When supply hits 6 months then I would say buy. I just hope this plan doesnt keep housing prices high, they need to fall.
Great cover for congress, lots of bad news. They can't get tax payer money on good news. Great timeing don't you think.
Houses are still way overpriced historically from the runup since 2001. And given the credit crunch, I think using 6 months supply doesn't mean anything. We have a real possibility of a near Depression-class economy. The LAST thing I would want to do is look at the "supply." If this $500 trillion whatever leveraging cannot be somewhat unwound, houses could fall MUCH MUCH further.
Thats such B.S. We already hit bottom. Im in sacramento (one of the hardest hit areas in the country) we had a 12 month inventory of resales in february of this year...today we have just a little over a 2 month inventory of resales. And the thing is, that because they report that prices are falling from YTD when they do those figures, it takes another year before the rest of the public figures out prices are going up. So that means, more than likely, we will see the news reporting home prices falling YTD until about april/may of 2009. Another thing i hate is when they put that headline "home prices down 9.5% in july" How freaking misleading is that? I mean image if you took a part time wal-mart employee who makes 13,000 per year and he went around telling everyone "yeah, I made $13,000 dollars in july" when he means he made $13,000 from july of last year to july of this year. If you heard a bunch of wal-mart employees talking like that, im sure half the people in this country would be running to wal-mart to find out if they are hiring! So of course when they read that in the paper, they will say "hell, I'm not buying a house...it just dropped 9.5% in july...thats almost 20k of value lost in 1 month" they will say. (because they are misled by the headline and we know most people dont really read the whole article)
That's assuming rates stay low. I was in homebuilding in the early 80's and conventional loans were 21.5%. Let mortgage rates get to 10-12% and you will have to cut prices in half again. John