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Home Sales and Prices Continue to Fall

Throughout the country, existing home sales dropped more than what was expected. With the economic crisis looming overhead, many prospective home buyers are holding out even while home prices are falling more than they have in nearly half a decade. Numbers are expected to fall further due to the fact that many of the numbers reflect homes in contract before the recent crash of Wall Street.

Existing home sales fell more than three percent last month according to the National Association of Realtors. Median prices also fell, dropping more than eleven percent compared to the previous year. What's alarming about this statistic is that we have not seen this kind of drop, year-over-year, since the late sixties.

In hopes of gaining some sense of stability with home prices, the NAR is trying to convince lawmakers, as well as Obama, that the government must spend around fifty billion dollars to subsidize lower rates, saying that by doing so would create room from nearly a half million "near future" home sales. Some experts believe that if the government does not choose to intervene that there could be more damage done to the already troubled economy.

As of now, home sales are expected to continue to fall, with some experts agreeing that the numbers could be the lowest we have yet seen since the housing market began its descent. Lenders are still not loosening their grip enough and people are still losing their homes at a frantic pace. However, Norma Securities chief economist David Resler that the housing market is beginning to show signs of hitting bottom.

Homes sales were down in a greater portion of the United States, but Western home sales were up over forty percent compared to the previous year. Some buyers have been able to purchase homes in areas like California and Nevada, at what were once thought of as impossible bargain prices. Numbers suggest that homes that were in foreclosure, or facing it, made up for nearly half of all sales last month.

There are too many homes still on the market to able to see clearly through the fog of the housing slump. Inventory numbers are at all-time highs, mostly due to the historic number of foreclosures on the market. These numbers are not expected to drop anytime soon, until we are able to reign in the foreclosures.

President-elect Barack Obama says he will honor the efforts made by the Bush administration to rescue the financial institutions. However, Obama is also urging Congress to ok his new stimulus package, which he says will improve job growth and give more stability to the current economic crisis.

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