It's official: Prices fell in 2007
The median price of an existing U.S. home fell 1.4 percent last year, the National Association of Realtors reported today. It is the first drop in annual median prices since the NAR started reporting data in 1968, and possibly the first since the Great Depression.
Sales volume posted the steepest drop since 1982, though the NAR emphasized that volume was still the fifth-highest in history -- a result of the nation's growth.
We are expecting to have year-end sales data for Massachusetts early next week.
The confirmation that prices dropped last year won't come as a surprise to many, as it simply confirms the end of a story that was written throughout the year. The median price was $218,900, down from $221,900 in 2006.
But there was some new news. The finance blog Calculated Risk points out that the number of homes on the market hit the highest level ever reported in December. The number of sales dropped to levels last seen in 2000. Both the slowing volume and the rising inventory generally indicate that sellers will be forced to cut prices further in order to find buyers.
Even the relentlessly optimistic NAR saw the data as somewhat cloudy, seizing the moment to call on Congress to raise the maximum value of government-backed loans to $625,000.
Once again, we'll know more about the situation in Massachusetts next week.
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