The standard price for a house fell–% to $169,000 in the first quarter from a year earlier, the National Association of Realtors reported. This is an unprecedented drop that no one has seen in thirty years.
The reason for this drop is said to be the fact that first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the average one realtor group said. With previously house sales going up, many realtors can now offload these older houses off their lists and concentrate on the newer houses. Many of these older houses are from empty nesters and retirees.
The going price for the 4 months of 2008 and the first of 2009 is at 26% less than the peak of $227,600 in the third quarter of 2005. The newest mean price was down from a year earlier in a number of American city areas included in the survey.
The lowly mean price among the suburban areas was $30,300 in Saginaw, Mich., and the largest was $570,000 in Honolulu. Most of the areas with the lowest prices are in troubled parts of the industrial Midwest. But an overstock of homes in Cape Coral-Fort Myers, Fla., pushed the median down 59% from a year earlier to $87,300 — ranking it just below Gary, Ind., which, at $92,000, was down 26%.
The lowest mean price among the suburban areas was $30,300 in Saginaw, Mich., and the largest was $570,000 in Honolulu. Most of the areas with the lowest prices are in areas of the industrial Midwest where unemployment is high.
The great number of unsold, foreclosed, and flipped (constantly sold and resold houses) has caused a glut in the market. Because of this a number realtors are frantic to get these houses off their hands. The reason for this is because as long as these houses sit on the ground the realtors have to pay property taxes on the houses.
As the market slows and housing declines the progression in many houses will drop. The houses most affected by this will be the brand new houses built in the last 8 years. But this not to say that those houses are not worth their weight in gold, history has shown that even in a down economy housing remains a steady investment.
It has been projected in the next few years the prices will drop. This may alarm a lot of investors and first time home buyers, but the indicators are that the prices are actually going back to pre-Bush government levels. As the middle decreases and the current houses on the market are bought you will see a steady increase in house prices and the resale value. It will take time but time is all you have once you have bought a home.
It has been estimated that in the next 10 years prices will stabilize and then begin to rise again. So buy a house now!
Graham McKenzie is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.
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