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And Home Prices Drop By Record Amount

 

According to the National Association of Realtors, whose records go back to 1979, the median U.S. price for an existing single-family home dropped a record 15.6% to $174,100 in the second quarter of this year.

But Home Sales Increased

Meanwhile, sales of new homes increased by 11% for new homes and 3.6% for existing homes, which suggests that it’s a buyer’s market, and that buyers are taking advantage of the falling prices.

The total dollar reduction was $27.8 billion, and the states that were hardest hit were Nevada (15%) and Florida (13%) and a quarter of would-be sellers lowered prices by around 10%.

Which States Reduced Had The Most Reductions?

Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions of around 33%.

Then came,

Oregon 29%, followed by,

Washington
New Jersey
Minnesota
New Hampshire
Maryland.

Which Cities Were Worst Hit?

Jacksonville, Florida 38%
Portland, Oregon 35%
Milwaukee, Minneapolis, Boston and Seattle 34%
Albuquerque, New Mexico, and Chicago 33%
Detroit; 16%
Las Vegas 15%
Miami 13%
New York City and Phoenix 12%
San Francisco and Los Angeles 10%

* Undeveloped land and foreclosed properties were excluded from the above estimates.

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The Commerce Department reported on Tuesday March 2009, that construction of new homes and apartments jumped by 22.2% from January to February, to a seasonally adjusted annual rate of 583,000 units.

Moreover, applications for building permits, which are generally considered to be a reliable sign of future activity, also rose in February by 3% to an annual rate of 547,000.

The number of new housing projects that builders broke ground on was mostly in apartment construction and came in spite of forecasts by analysts that there would be a drop in construction to around 450,000 units.

The west of the country which led the housing boom was the only area not to experience a rise and February’s increase needs to be seen in the context of January’s dismal showing of 477,000 units which set a record low, and even February’s rate was down 47.3% from a year ago.

Figures contained in a report by Credit Suisse last month indicate that over two million American homebuyers faced foreclosure proceedings last year, and it’s thought likely that the number could rise to around ten million over the next two to three years.

Many would be buyers have been unable to obtain mortgages due to the tighter lending standards brought about by the credit crisis and unemployment is at a twenty five year high of 8.1%.

The National Association of Home Builders’ housing market index was flat for March at a reading of just nine points, being just one point above January’s all time low. The figure has been below ten since November with any number below fifty being a negative one.

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