renovation

Home Prices Forecast: First Ever Drop.
Economists Predict Impending Report Will Show Median Price Has Dropped Since Last Year !
Economists predict a government report due out Thursday will show a national drop in the median price of single family homes since last year. If economists are right, it will be the first time that's ever happened.
"Cumulatively, prices should fall somewhere between five and 10 percent nationwide," said economist Mark Zandi.

The median price for a single-family home is currently $223,800. The median price is the number midway between the least expensive and most expensive houses sold in a given period.

Zandi says too much inventory, weak demand and tighter credit have been problems in some markets for two years.

"Well over half the country is now experiencing price declines and will experience further price declines through this time next year into 2009," Zandi said. "That's unprecedented."

In Reno, home prices are down more than 6 percent from a year ago and are expected to drop close to 11 percent in the next year.

Minneapolis prices are down 2.6 percent from last year.

And in Hartford, home prices are down more than 5 percent from a year ago and are expected to fall further.

But the price slump hasn't spread everywhere. Home prices are up in places like Charlotte and Austin.

With home prices dropping in so many areas, many families could lose a big financial cushion—their home equity.

"For those homeowners who bought in over the last couple of years, that piggybank is broke," Zandi said. "There is no cash the to pull out because house prices have been declining and they have no equity in their home."
http://www.cbsnews.com/stories/2007/...n3205052.shtml

in detroit area (detroit proper that is ) this has gone on for years .not all of the city but a large part anyway .

for me personal it wont hurt at all or much i think. i have own this house for 20 plus years and bought it cheap at the time.
also there a retail boom taking place right in my back yard. and there looking at buying property all around me as im right off the main road. its just waiting till that offer is made. and i exspect one in the next 24 months or less! they just sold a whole bunch of home across the main road from me. and are finishing a Kohls dept.store that will open nov.3 . and talk /rummor has it target and sams/walmarts wants in .jc penny just broke land 2 weeks ago a block from my house and also a hospital complex .on the same property .that will be odd a dept store and hospital using the same parking lot ?

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zippyjuan

Not quite true the way they say it. Median is the price with half of houses selling for more and half selling for less. This is not necessarily the average or midway between the highest and lowest prices. Using the median price is a more accurate guideline since it tends to reduce the impact of having a lot of very expensive or very cheap homes selling.

If you sold ten houses, nine for 100,000 and one for $1,000,000, the median price would be $100,000, the average would be $190,000 and the mid point they mention here $550,000.
Given the recent apreciation of housing prices, a ten percent decline is really not that much. In truth, housing prices have tended to move very little when inflation is factored in. The steep run up- fueled in big part to generous lending practices, was very outside the norm. I think the creative financing allowed housing prices to rise farther than they would have without it and that there is basically some readjusting going on.

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Prngr44

Isn't that saying the same thing? Median is the same thing as midway between the highest and lowest prices?

zippyjuan

They said it was the midpoint between the highest and lowest- that, as I showed, is not necessarily as the point where half sold for higher and half sold for less- which is the true median ($550,000 vs $100,000 in my extreme example). They just chose poor words to try to describe what median is.

Maarchk

median and midway aren't always the same.

if i have 1,2,10. The median is 2. There is one number below, and one number above that middle number.

The midway is 5. Its the range, 1-10 divided by 2.

The midway may not be an actual number in the sequence. The median will always be an actual number.

Darn you zippy. I had a phone call while posting my reply.. oh well, two answers are better than 1.

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