Widespread declines in housing prices forecast for next year
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By Martin Crutsinger
the associated press
October 4, 2006
WASHINGTON * Housing prices, slumping after a five-year boom, are projected to decline in half of the nation's metropolitan areas, with Florida, California and the Northeast among the areas hardest hit.
The forecast by Moody's Economy.com, a private research firm, presents one of the starkest views yet of the housing slowdown that has been gathering force in recent months.
The West Chester, Pa.-based forecasting firm projects that the median sales price for an existing home will decline in 2007 by 3.6 percent, which would be the first decline for an entire year in home prices since the Great Depression of the 1930s.
Median price declines on existing homes already are evident in South Florida.
Palm Beach County's median price declined $25,400 to $386,000 in August, marking the first year-over-year drop in seven years, according to the Florida Association of Realtors. The August median for Broward County fell $24,200 to $362,800. It was the second month in a row that Broward's median declined on an annual basis.
The 195-page national report, "Housing at the Tipping Point," was obtained by The Associated Press before its general release today.
The report projected that 133 of the nation's 279 metropolitan areas would see price declines. That is quite a contrast from the past five years when low mortgage rates pushed sales to five consecutive annual records and prices in the hottest sales areas skyrocketed.
But this year, the once red-hot housing market has cooled significantly. Some analysts are worried that the slowdown could become so severe that it could drag the entire country into a recession, much as the bursting of the stock market bubble in 2000 led to the 2001 slump.
The housing report said the biggest percentage price decline will be in Danville, Ill., where prices have already fallen by 18.7 percent from the peak in the second quarter of 2005 to a low-point in the first three months of this year. That setback occurred because of layoffs in autos and other manufacturing industries, which depressed the local economy.
The second biggest decline is projected to occur in the Fort Myers area, a fall of 18.6 percent from the peak in the final three months of last year to a low-point for prices that is projected to occur in the second quarter of 2007.
Business Writer Paul Owers contributed to this story.
Copyright (c) 2006, South Florida Sun-Sentinel
--------------------
By Martin Crutsinger
the associated press
October 4, 2006
WASHINGTON * Housing prices, slumping after a five-year boom, are projected to decline in half of the nation's metropolitan areas, with Florida, California and the Northeast among the areas hardest hit.
The forecast by Moody's Economy.com, a private research firm, presents one of the starkest views yet of the housing slowdown that has been gathering force in recent months.
The West Chester, Pa.-based forecasting firm projects that the median sales price for an existing home will decline in 2007 by 3.6 percent, which would be the first decline for an entire year in home prices since the Great Depression of the 1930s.
Median price declines on existing homes already are evident in South Florida.
Palm Beach County's median price declined $25,400 to $386,000 in August, marking the first year-over-year drop in seven years, according to the Florida Association of Realtors. The August median for Broward County fell $24,200 to $362,800. It was the second month in a row that Broward's median declined on an annual basis.
The 195-page national report, "Housing at the Tipping Point," was obtained by The Associated Press before its general release today.
The report projected that 133 of the nation's 279 metropolitan areas would see price declines. That is quite a contrast from the past five years when low mortgage rates pushed sales to five consecutive annual records and prices in the hottest sales areas skyrocketed.
But this year, the once red-hot housing market has cooled significantly. Some analysts are worried that the slowdown could become so severe that it could drag the entire country into a recession, much as the bursting of the stock market bubble in 2000 led to the 2001 slump.
The housing report said the biggest percentage price decline will be in Danville, Ill., where prices have already fallen by 18.7 percent from the peak in the second quarter of 2005 to a low-point in the first three months of this year. That setback occurred because of layoffs in autos and other manufacturing industries, which depressed the local economy.
The second biggest decline is projected to occur in the Fort Myers area, a fall of 18.6 percent from the peak in the final three months of last year to a low-point for prices that is projected to occur in the second quarter of 2007.
Business Writer Paul Owers contributed to this story.
Copyright (c) 2006, South Florida Sun-Sentinel
