Steepest Home Prices decline

According to the NAR, the median price dropped 5.8% in fourth quarter of 2007.  That is the steepest drop on record. 

You have to love how Mr. Yun tries to sugar coat all these bad news. 

``The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,'' said Lawrence Yun, the association's chief economist. ``Higher ratios of sales for more moderately priced homes are naturally dampening the national median price as well as the data for some of the more expensive markets.''

Yeah, it was the jumbo loans that did it.  One month it's the jumbo loans - next month it's subprime - next month it's Alt-A - then it's prime.  But the problems are contained to those loans only.

By the way, after initial declines, the mortgage rates are going up.  It looks like they are not following the fed rate cut as some people were expecting.  I will detail the rates in another post.

Each of the four U.S. regions recorded losses compared with the fourth quarter of 2006. The West took the worst hit, at 8.7%. Prices dropped 4.8% in the Northeast, 5.4% in the South and 3.2% in the Midwest.

In Lansing, Mich., square in the Midwest Rust Belt, prices plunged 18.8% to $109,600. In Sacramento, Calif., prices fell 18.5% to $197,600, and in both Jackson, Miss and Riverside, Calif. prices dropped 16.8%.

 

So if it was Jumbo Loans problems, what about Midwest Rust Belt wher prices dropped 18.8% to $109K?  I guess jumbo loans are trickling down.

 

The least expensive single-family-home market in the nation got even cheaper, as prices in Youngstown, Ohio, dropped 9.3% to $72,600. .The most expensive market, San Jose, Calif., got dearer, with prices up 11.2% to $845,300.

 

Huh?  Prices went UP in a high price neighborhood?  And the problems were due to Jumbo Loans?  If MSM looks at these numbers, even they would be able to through the lies.

 

"The healthiest housing markets today generally are moderately priced and are experiencing job growth and often population growth, which in turn is supporting strong price growth," said NAR's Yun. "Most of the weakest markets have either experienced both job and population losses, or they are experiencing corrections following a prolonged period of rapid price growth."

 

So down markets are overpriced markets or job and population losses.  Stating the obvious.

 

"Higher limits for FHA loans, which go into effect March 14, will be a big help to first-time buyers in high-cost markets," said NAR President Richard Gaylord.

 

"Higher limits for conventional loans purchased by Freddie Mac and Fannie Mae will take a bit longer," he said. "When they become available, high-income, creditworthy borrowers in high-cost areas will have access to affordable and safer financing, and that will help unleash pent-up demand."

 

But other industry insiders are predicting harder times ahead. A Merrill Lynch report in January forecast peak-to-trough price declines of 15% in 2008 and another 10% in 2009 before markets begin to recover.

 

We've got a long way to go before we can call this a bottom.  Of course, you'll have NAR clowns revising their numbers every month.

 

http://money.cnn.com/2008/02/14/real_estate/home_prices_fall_for_year/index.htm?postversion=2008021410