US: Largest home price drop on record.

Ouch. Todays CNNMoney has an article about the fourth quarter report from the National Association of Realtors showing the largest price drops on record with price declining US markets now outpacing those with gains.

The most recent median prices are down even more: 3.4 percent since hitting record highs in the second quarter. Almost three-quarters of the markets, reported on by the group, saw declines in median prices over the past six months, with eight reporting double-digit declines.

Vacation markets, where investor-buyers had driven up prices during the building boom of 2005, were particularly hard-hit.

The Sarasota-Bradenton-Venice, Fla., market saw the biggest year-over-year decline in the fourth quarter, with prices plunging 18 percent.

When looking at the change between the fourth quarter and the second-quarter peak, the Palm Bay-Melbourne-Titusville, Fla., market saw the biggest drop, with median prices plunging 19.5 percent.

Wow. Those are mind-boggling price drops in a time of super-low interest rates and a strong economy. It remains to be seen how bad the US housing slump will get, and what effect this will have on the economy as a whole. For now the NAR is repeating their mantra “I think the worst is over”.

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markx
markx
13 years ago

Funny that NAR go from "are you missing the RE boom" to "Why there's no RE bubble" to "15% is in the bag" to "It's just a blip." to "The worst is over".What's next? Patriotz: Not much reliable "same home" data is avaialable. Rober shiller's index is still up, but that particular index contains refinancing data, so maybe mortgage fraud is propping it up. Would be interesting to see when that falls. For now, NAR data is as good as it gets, and it comes from the bullish side — what a bonus.

patriotz
patriotz
13 years ago

I wouldn't take anything too seriously except maybe the national numbers.I don't take anything seriously except same-house comparisons. Medians can be skewed all over the place by changes in market mix.And all the same-house comparisons I've seen are down bigtime, all over the country.For example, this one

WoodenHorse
WoodenHorse
13 years ago

Warren,Read the article. Here's the nub:"Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter a year earlier, according to the report from the National Association of Realtors (NAR). "The record slump is the nationwide 2.7%. And this is from an NAR report.How's about you go spread the bullish sentiment elsewhere?

Warren
Warren
13 years ago

satv's miscellaneous comments aside, this report includes very few major cities. I wouldn't take anything too seriously except maybe the national numbers. I've been to Bloomington IL for example, its "Anytown USA". There are literally thousands small towns like this across the land. That particular market may have dried up because some major local employer closed a factory that employed 500 workers, for example. Show me major urban markets and I'll listen.Despite the fact that real estate is not invincible, and more people need to get it through their heads, CNN seems to be leading with sensationalist numbers rather than meaningful stats.

satv
satv
13 years ago

funny but not too funny did you post your opinion.

betamax
betamax
13 years ago

Now we know why vested interests dug up Greenspan today and trotted him out like a one-trick pony to reassure the great unwashed.

satv
satv
13 years ago

HECK OR FACTS are missing————————-No reason has been given which brought this price drop, this price drops are very plain.I beleive that from after math of Charlie,Katrina kind of disaster people are worried to spend money on real estate.I have heard that there are 2 million aliens are living in usa.America is dealing with terrorism and illegal aliens inside and outside.Another war is looming fear of Iran war and north korea always some jokes around there.Now even Canadian citizens can't cross border without passport and visa.Lots of checking and always big line up on borders, airports.This kind of environment does not bring joy,But they are trying to secure future and sooner later people will digest as soon their forces with draw from Afganistan,Iraq States of joy can be restore quickly.Vancouver is filling the gap till that time plus 1.70 million… Read more »

Jim
Jim
13 years ago

"Despite the record weakness, there were some markets that showed strong price gains. The best was Atlantic City, N.J., where the median price was $339,800, up 25.9 percent compared to a year earlier"I hope Vancouver is not the Atlantic City of Canada.