Housing Bubble Deflation Continues

[unlawflcombatnt]

Evidence continues to mount that the housing bubble is deflating. December existing home sales declined 6% to 6.60 million per year from November's 7.0 million annual rate. This was a much larger decrease than the predicted decline of 6.87 million annual rate. This marks the 3rd consecutive monthly decline in existing home sales. Inventories of unsold homes continue to rise. This months increase to a 5.1 month supply is also the 3rd consecutive month on increased unsold homes. The annual rate of price increase declined to 10.5% year-over-year, which marks the 2nd consecutive month of decline in annual appreciation rate. (This is the result of 2 straight months of monthly price declines.)

It is also anticipated that the release of next week's New Home Sales number will also show a decline in the annual rate of sales.



The "Briefing.com" link for this can be found at:
Existing Home Sales


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[TechBear_Seattle]

1. If this bubble continues to deflate...

I might -- might -- be able to afford a 30 year mortgage in Seattle by the time I hit 50.

[unlawflcombatnt]

2. Only time will tell

Only time will tell how much it's going to deflate and how much. But prices are definitely declining at present in most bubble areas, and are predicted to decline even further.

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[formernaderite]

4. even if it deflates a bit...remember

houses were cheaper during the last bubble in the early 90's. Prices might come down for a bit...but they'll slowly creep back up. It will just be a slow creep.

[unlawflcombatnt]

5. Housing Prices

Housing prices are predicted to decline for at least the next 2 years in California, according to CNN Money talk.



This information can be found at Housing Prices

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[unlawflcombatnt]

3. Sales Down 11.7% West; National 2006 Sales May Decline 10%

Analysts are predicting a probable 10% decline in both new and existing home sales for 2006, according to an AP story by Martin Crutsinger. December home sales in the West declined 11.7 %, according to the article.

"Analysts are forecasting that sales of both existing and new homes will fall this year, perhaps by as much as 10 percent, reflecting the adverse impact of rising mortgage rates and buyer resistance to current price levels."

"Analysts at Goldman Sachs estimated that the housing slowdown will begin to be a drag on economic growth by midyear and by early 2007 will be trimming growth by around 1.5 percentage points..."

"We think that housing will go from being a source of strength for the economy over the past several years to a drag on the economy over the next couple of years," said Andrew Tilton, a senior economist at Goldman Sachs."

Housing Slowdown May Hurt Economy

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