Home Prices Forecast: First Ever Drop

Economists Predict Impending Report Will Show Median Price Has Dropped Since Last Year

(CBS)  The already rough real estate market may be about to get bumpier.

Economists predict a government report due out Thursday will show a national drop in the median price of single family homes since last year. If economists are right, it will be the first time that's ever happened.

"Cumulatively, prices should fall somewhere between five and 10 percent nationwide," said economist Mark Zandi.

The median price for a single-family home is currently $223,800. The median price is the number midway between the least expensive and most expensive houses sold in a given period.

Zandi says too much inventory, weak demand and tighter credit have been problems in some markets for two years.

"Well over half the country is now experiencing price declines and will experience further price declines through this time next year into 2009," Zandi said. "That's unprecedented."

In Reno, home prices are down more than 6 percent from a year ago and are expected to drop close to 11 percent in the next year.

Minneapolis prices are down 2.6 percent from last year.

And in Hartford, home prices are down more than 5 percent from a year ago and are expected to fall further.

But the price slump hasn't spread everywhere. Home prices are up in places like Charlotte and Austin.

With home prices dropping in so many areas, many families could lose a big financial cushion—their home equity.

"For those homeowners who bought in over the last couple of years, that piggybank is broke," Zandi said. "There is no cash the to pull out because house prices have been declining and they have no equity in their home."

[gomanny1]

When banks and S/L made all the mortgages everything was in control, now with all the Mortgage brokers wanting to get rich by giving mortgages to anybody with a pulse, we all have to pay for this clean-up.

[toolmangler-2009]

I paid $11,500 for my house nearly 40 years ago. It has a market value of $275,000 on the current market. I guess I won''t lose much if it devalues back to under $20.000. That will happen if Bushit gets his way. (''course I''ll probably be over 100 by then anyway.)

[nottellin1]

developers and flippers need a reality check and realize the housing prices need to drop at least 10% if not more to make up for the past 4 years of rediculous over pricing of homes.
Posted by fiteit1 at 01:35 AM : Aug 27, 2007

Of course if you live in So Cal, prices need to drop about 50% to make buying a home affordable for any but the super rich here.

[tuckerndfw]

I built my own custom, 3 room home for less than a dollar.

After locating a nice area beneath a not very heavily travelled bridge, I went to a local appliance store and retrieved three of those large cardboard boxes they use for large appliances.

I also have a vacation home made of the same material.

The GOP economy will require a lot more flexibility on the part of potential home owners.

They were called "Hoovervilles" the last time the GOP bankrupted the US Treasury. I suppose I can call my new subdivision "Bushville." I hope none of those "others" decide to move in and bring down property values.

[gheemaster38]

Can someone please unplug oakishpines Computer!!! or at least get him a Translator. I am sure what he is stating is interesting and informative if I could only DECODE IT!!!

[cepe10-2009]

I built my own 3500 sf custum rancher with full unfinished 3500 sf basement and a 3 car garage for less than $200k. The same house from a builder would be $450K+ in my area. It took me two years weekends and evenings but obviously a quarter of a million dollars is worth it. Bottom line houses these days - materials and labor are WAY over valued.... Especially considering $10/hr laborers are actually build the house. The contractors are raping the American dream.

[ov442]

I dont think being a loser or teenager is what Brianbwb meant.

I think the matter at hand is that the prices are way too high for housing/cost of living compared with what the VAST majority of americans earn in a job here.
The IRS publicized median household income in 2005/2006 is $41,000 thats HOUSEHOLD, meaning any household with more than one income or job is included.
Now, that means there are a lot more households making less than 41k, than more because you can only go so low - to 0$ but you can go as high as your accountant can count on the upper scale.

That being fact, How does the average household live on approx 41k, and hope to ever buy a home averaging 223,000.00 which is the american dream?
The fact is they cant, and wont as long as the government does NOTHING to stop corporations and big financial companies from *** the public.

Unfortunately, although it''s the job of government - to protect the populace from unscrupulous characters, corporations, and threats of any kind, they dont do it under GOP dictatorship because the GOP makes their profits off of *** the public, then their minions of evil support that.

[bernieb14]

brianbwb

Teenagers are usually not home buyers. I''m assuming you''re a teenager if you''re still making minimum wage. If not, why are you only making minimum wage? If you goofed off in school and didn''t plan your life better than you should have to make better than minimum wage as an adult ready to buy a home, then don''t complain to me or anyone else about your poor life and blaming it on humanity. If you''re a loser just admit it.

[brianbwb-2009]

$223,800 divided by the minimum wage is 34,431 hours needed to buy it. That is 12 years of stable employment, if you don''t need to eat, drink, buy clothes, take transport, and don''t need lights, water, and gas.

Part of what is wrong with the economy is that humanity is not figured into the equation, so it is not a valid measurement of the country''s economic health.

[shanev137]

Wow, Bush is finally admitting that his economy isn''t doing well.

Amazing.

[oakishpines]

'' ... man on man wars rape babies, dare man on boy wars rape more as girl on girl wars rape 30-60 year olds, dare girl on men wars rape more ... can''t understand ones good enough to fake missing towers but don''t or ones ableto throw themselves from airplanes w/o parachutes but don''t ... ''


'' ...

i asked ''them'' how i could be

the hike naked dance dressed porno get sick tax world crowd

dancing get well feed world songs

rallied round sick beds drifting tens millions spore bloom weed dragon trail fickle first aid lunch farm cottage studio trail grfoups

and be a shape shifting dragon traveling the universe at speed of thought ,

''they'' mumbled some nonsense about ports like weblinks

such that 1 can walk into a someones aura thats broadcasting 25 or 220 ports linked to other galaxies & universes

& i can be one of 25 or 220 folk that temporarily sets their in that aura a port or few of my own

and they reminded me i can hold an infinite number of the earth in palm of hand

with perfect comprehension and no comprehension whutsoever at once

just as there''s infinite numbvers of seperate and disdinct points between any two seperate and distinct points on a geometric line

... ''

'' ... eternal storyboards swimming infinite oceans of eternal storyboards ... ''


'' ... god ''sent'' a girl to say: ''revenge belongs to god'' as she struck the two people standing next to me ... she''s so clueless ... ''

[oakishpines]

'' ...

had a million dollars wanted ten million, not one million dollar film, or 1000 $1000, but 100 million kids with free medical you are here map song dance skit kits, to make a hundred million dollars for nothing

me verse the world i deserve 99%, the world occupys 99% space time so deserves 99%, so 50% / 50% may be rational and equitable shareing of my market share

210 million represents the richest 3% with over 95% of wealth, poverty lines range $2 to $60 each work day, so giving to 440 to 730,000 each workday for tips of a penny to a dollar from 1/2 % to 11 % of folk marketed to


6 or 10 billion folk is 90,000 counties of 90,000 folk is 300 trail groups of 300 folk, girls get bored and move each 20 seconds to 20 nminutes so i not call them communities?)

$12,000 per year poverty line will buy $60,000 of 2500 sf land and 340 sf home

2500 sqft (50 ft x 50 ft) is 200 lineal feet perimeter, 2.2 to 3650 ''grapes'' per lineal foot (grapes as example or seaweed / algae song / dance art / craft wutever)


... if only 2500 square feet could float like some kind of spore bloom weed dragon tinkering densitys and surface areas and such ...


trails of life is more like kindergarten class, what do you like what do you want to do this that ok well show you how now like this now like that now like this now like that

... ''

[fiteit1]

developers and flippers need a reality check and realize the housing prices need to drop at least 10% if not more to make up for the past 4 years of rediculous over pricing of homes.

[grammawhamma]

Posted by USAyesterday at 11:40 PM : Aug 26, 2007

I agree. Also don''t spend above your means to impress the Jones''s. Buy what you can afford and if it''s a dump then gradually fix it up when you can afford to.

[grammawhamma]

7pesos, is that really you? or have southerners taken you hostage and are now using your cbsnews login?
Posted by zorlacskates at 08:34 PM : Aug 26, 2007

LOL!! LOL!! Good one.

[lochlan-2009]

Again, inflation is also not being reported on with the falling home prices. If housing prices stay flat, and inflation goes up 3,4,5%, your house has lost the value inflation even know the price on your house hasn''t changed a single penny. If the market goes down well, that''s obviously worse, and if the market matches inflation then you''re breaking even.

Just a little FYI the media conveniently don''t fill us in on. Kind of like the American dollar depreciating by over 50% since Bush took office, but the media are celebrating the Dow reaching a new high of 14,000 as a sign of how well the economy is doing. Hello people, that means you''ve lost a LOT of money in the global market, the Dow would have to be around 16,000 in order for America not to have a net loss from seven years ago. But the media are blatantly tricking us into believing the countries economy is doing great.

[usayesterday]

There is nothing to worry about if you bought a home for what it was inteded for...

... to live in and enjoy. And, over the long term, (15 to 20+ years), your home pays you back all that you owed and possibly more!

As for the quick-buck-flipping-fvcks.... they are getting what they deserved.

[christiansin]

Luckily some tax payers invested in the bank, so it rocks for us.

[sharncedar]

Since the media works for the super-rich, we''ll have to post the actual thing going on, let''s follow the money. Jane Wannabe bought her house for $200,000, but out of pocket she is paying only the monthly $1300. This is mostly interest, it is a 30-year mortgage. The house went up in value to $400,000 thanks to the liquidity bubble created of, by, and for the rich. J. Wannabe decided she was now rich too, so she took out a home equity loan and spent the $100,000. Now she can''t pay her mortgages.

Who wins? Who loses? Jane Wannabe got $100,000 worth of junk, paying in probably only that much. She broke even, is now out of a house but she couldn''t afford a house anyway. The banks, who generated her loans, got their interest and aren''t holding the MBS anymore, they sold the loan as soon as they could.

The mortgages are now held by Freddie Mac or Fannie Mae or a pension fund, meaning we the public lose the difference in price as the house is foreclosed.

The only real winner is the banks, the only real loser is the young couple who can''t buy a house, and the taxpayer who has taken the risk for the bank (without our permission, of course, thank the Democrats for that one).

[zorlacskates]

7pesos, is that really you? or have southerners taken you hostage and are now using your cbsnews login?