First Time House Prices Fall Since 1993
Where were you in '93? Bill Clinton was just coming into office. Unemployment was high. A van bomb had exploded under the World Trade Center. I was living in my first home -- a condominium -- and it's price was starting to fall...
And that's what's happening now. For the first time since 1993, the National Association of Realtors says that their quarter report shows the home price across the US has dropped. According to an article in Realty Times, during the first quarter of 1993 the national median price fell for existing single-family homes. That happened again in the third quarter of this year; the median home price is down 1.2 percent from 2005. According to the NAR's data, it's not an isolated phenomena either; all the regions tracked by the NAR experienced a downturn in prices.
Condo prices took even a bigger hit than single-family homes. As a common entry-level purchase, condos tend to suffer more price fluctuation when buyer demand falls.
The only exception to the overall downturn is the metropolitan markets around the big cities. In most of these areas, the prices of homes and condos is still rising, albeit much slower than we've seen for a long time. So, for the data to show an overall downturn, the prices outside of cities must be falling enough to pull the overall median down. That means that areas outside of cities are suffering more downward price pressure than the cities are. How long can it be before the price pressure hits the metro markets?
Hold onto your hats. I'm not sure if anyone really knows whether the ride will be easy and gentle, or wild and unpredictable.