Hang On ... We Haven't Hit Bottom in the Housing Market
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Remember the housing market disaster? How home prices are plummeting? You don't hear much about that these days, do you. This morning, Joe Scarborough's obsession is "Obama's saccharine speech" in Germany. You know, the one I posted yesterday that was greeted by a huge crowd numbering in the hundreds of thousands.
In normal times, one would expect the value of one's home to appreciate by around 4-5% per year. Our house appreciated by around eight percent between the time we bought it and our first refinance two years later. Today, houses similar to mine are just now falling in price -- and are sitting on the market dangerously close to the number at which my own house should fall.
Unlike many people, we haven't used our house as a piggybank to buy vacations and SUVs -- or even put in gourmet kitchens with granite countertops and stainless steel appliances and Aga cookers on which no one actually cooks. But as prices continue to fall, here in New Jersey, the state I call "The Next Flint, Michigan", I wonder how long it's going to take for the price to get down to what we paid for it.
In the latest evidence that prices are still sliding, the National Association of Realtors reported Thursday that the median price of existing homes sold in June fell to $215,000, down 6.1 percent from a year ago. Sales fell 2.6 percent from the month before -- far more than analysts had expected.
Richard Gaylord, president of the Realtors, said a recent survey found that nearly one-quarter of potential home buyers are "waiting on the sidelines." A major housing package passed by the House Wednesday after months of debate could help boost the market by offering a credit to first-time home buyers, the group said.