Bending the Third Rail
Because We Should, We Can, We Do
Thursday, October 26, 2006
The Unwealth Effect
Uh oh:
WASHINGTON - The median price of a new home plunged in September by the largest amount in more than 35 years, even as the pace of sales rebounded for a second month.

The Commerce Department reported that the median price for a new home sold in September was $217,100, a drop of 9.7 percent from September 2005. It was the lowest median price for a new home since September 2004 and the sharpest year-over-year decline since December 1970. The weakness in new home prices was even sharper than a 2.5 percent fall in the price of existing homes last month, which had been the biggest drop on record.
Here in Northern California prices are down nearly 8% over last year.

I'll betcha that the sales are not speculative, but likely folks getting out before some of those nasty mortgage deals catch up with hasty buyers. Foreclosures are also heading for the moon. The only question left is just how deeply the bubble pop will penetrate into the consumer driven economy.

UPDATE: Kash offers a post on the likely length of such a slowdown which thoroughly contradicts the "the worst is behind us" cheerleaders. As he points out, housing cycles move sloooooowwwwwly.
Written at 9:12 AM by Greyhair.
0 comments