Lost in all the happy talk today was something not so happy after all.
While the Dow surged higher, and President-elect Obama introduced his new economic team, the reading from ground-zero for all of this mess only became worse. Existing home sales plummeted in October even as home prices continued to fall.
According to the National Association of Realtors (NAR), sales of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million units in October, from a downwardly revised pace of 5.14 million in September.
Meanwhile, the median sales price of existing homes also plunged 11.3 percent from a year ago to $183,000. That was the largest year-over-year drop on records going back to 1968, and the lowest median sales price since March 2004.
That means that for most homeowners who have bought homes since then, their homes are worth the same or less than when they bought them.
And if you are the one person left in the world who refuses to believe home price can fall, the following chart just might convince you otherwise.
From the NAR Report
Sale Price of Existing Homes
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Year |
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U.S. |
Northeast |
Midwest |
South |
West |
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Median |
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2005 |
|
$219,600 |
$271,300 |
$170,600 |
$181,700 |
$335,300 |
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2006 |
|
221,900 |
271,900 |
167,800 |
183,700 |
342,700 |
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2007 |
|
219,000 |
279,100 |
165,100 |
179,300 |
335,000 |
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|
Not Seasonally Adjusted |
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2007 |
Oct |
206,700 |
257,500 |
160,200 |
171,000 |
316,900 |
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2007 |
Nov |
208,800 |
257,900 |
160,300 |
172,900 |
325,400 |
|
2007 |
Dec |
207,000 |
254,900 |
159,000 |
172,300 |
311,100 |
|
2008 |
Jan |
199,700 |
268,500 |
148,500 |
164,000 |
296,200 |
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2008 |
Feb |
195,600 |
264,500 |
142,800 |
163,300 |
292,400 |
|
2008 |
Mar |
200,100 |
283,600 |
150,900 |
167,700 |
284,800 |
|
2008 |
Apr |
201,200 |
261,300 |
157,700 |
170,000 |
285,700 |
|
2008 |
May |
207,900 |
278,300 |
162,900 |
174,900 |
286,000 |
|
2008 |
Jun |
215,100 |
264,900 |
172,700 |
185,700 |
285,700 |
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2008 |
Jul |
210,300 |
278,300 |
167,700 |
176,900 |
282,000 |
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2008 |
Aug |
203,100 |
271,100 |
168,000 |
176,500 |
251,600 |
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2008 |
Sept r |
191,400 |
250,800 |
149,700 |
165,700 |
255,100 |
|
2008 |
Oct p |
183,300 |
241,700 |
149,400 |
161,100 |
231,400 |
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vs. last year: |
-11.3% |
-6.1% |
-6.7% |
-5.8% |
-27.0% |
Anyway you slice it, it was one ugly report.
By the way, according the data, some 35 to 40% of all sales in October were foreclosures. That just goes to show you where prices are headed in the future as the markets fully adjust to new realities.
And like or not, there is nothing the government can do to stop it.
