One man’s crisis…
December 28, 2007
The bad news: Home-Price Declines Biggest on Record*:
Single-family home prices in the top U.S. markets declined in October at a record pace from year-ago levels, signaling that the gloom in the housing market may be far from over.
The Standard & Poor’s/Case-Shiller Home Price Index showed an annual decline of 6.7% in the 10-city composite, according to data released yesterday. The previous largest decline on record was 6.3%, recorded in April 1991.
That is scary. Home prices fell 6.7% from October 2006 to October 2007. One thing they don’t mention: home prices rose 175% from October 1997 to October 2006. Shouldn’t that be taken into consideration? That, in turn, brings me to the good news. Homes are now more affordable:
The silver lining behind the latest home-price data is that they signal the market is making what most economists see as a necessary adjustment, dragging home prices back into closer alignment with Americans’ ability to pay. The market is working its way “back to reality,” says David Seiders, chief economist of the National Association of Home Builders.
For those that bought at the peak, it sucks (if you have to move anytime soon). For those looking to buy a house, start looking for some deals.
*As the article states, this is a measure of twenty major metropolitan areas . Here in podunk, we never saw the incredible price appreciation that they did and are still enjoying modest YoY gains. Your mileage may vary.