NYT: "The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics...The reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen."

Never is a really long time.

Comments

[Fec Stench]

I knew a family twenty years near Oak Ridge who found themselves upside down on a mortgage. Haven't pockets of property value defaltion always been with us?

The median price of American homes is meaningless.

[Bubba]

"The median price of American homes is meaningless."

Yeah, but that fact can't be used for agenda sound bites/ink/bandwidth in places like this.

[Jim Caserta]

“For most people, this is not a disaster,” said Nigel Gault, an economist with Global Insight, a research firm in Waltham, Mass. “But it’s enough to cause them to pull back.”

The Times profiled three families last Sunday who were in mortgage trouble, supposedly to highlight bad mortgages. Looking at each case showed that all three added additional debt to their 100% mortgages which is how they ended up owing more than their houses were worth.

The problems today are not specific to mortgages, and you would have hoped that people would have been more skeptical at the "new paradigm", "new economy" hype. What would you have thought if I wanted to borrow $250k (from you) to buy RFMD stock in March 2000? Wouldn't have been good for you or me. Leverage helps multiply gains, but makes for messy loss situations.

[Ed Cone]

Fec, the fact that a national home market is a notional construct is what allowed the experts to say "never," even as pockets around the country experienced downturns (as the linked article discusses)-- that's what makes this moment so interesting.

[Fec Stench]

I agree it's interesting that Lereah got caught flat footed. The lesson I got was to beware of self interested sages.