Thursday, December 27, 2007

Housing Prices

"Home prices in 10 major metropolitan areas in October were down 6.7% from a year earlier, according to the S&P/Case-Schiller home-price indexes. ... The market is working its way 'back to reality,' says David Seiders, chief economist of the National Association of Home Builders. He thinks house prices will bottom out early 2009. ... The S&P/Case-Schiller index showed that some of the fastest declines in home prices are in metropolitan areas that were among the hottest during the housing boom. ... As measured by the S&P/Case-Schiller national index, home prices jumped 74% in the six years through 2006. During the same period, median household income rose 15%", WSJ, 27 December.

I expect house prices will fall after early 2009, possibly for another 12-18 months.

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