A periodic blog dedicated to providing commentary and encouraging debate on topics in Economics and Finance.

About Me

Age: 26 Occupation: Private Equity

Thursday, May 24, 2007

New Home Prices Fall 11%

All,
Sorry for the prolonged period of inactivity. I won't be able to get back on a good posting schedule for a couple of weeks. Lots of family issues and work have been making it too difficult to find time to post.

I'll have to be short.... I am extremely encouraged by the drop in home prices. It looks like market forces are finally starting to work... as this has (GASP!) led to MORE SALES! Gee, that complicated economics stuff actually works! Who would have thought lowering your price will get people to buy your house? I guess more people are learning that life's too short to have your house own you for 30 years.

This also means, because new homes are selling for less, existing homeowners will have to cut their prices to keep up... unless they don't want their houses to sell. I might actually be able to afford a house before I'm 45!

Even more encouraging is that incentives (like free kitchens, cars and cash back), which can total more than $20,000, have not been subtracted from the new median price... That means new homes are really going for $210 - $215k right now.

-eternitus

On a somber note, one of the sweetest women I've ever known passed away suddenly last week after falling ill on mother's day. She always treated me far better than I deserved. I thought I was special, but the enormous turnout to her funeral was testament to the fact that she treated everyone that way. I loved her dearly and she'll be sorely missed.

1 comment:

ghu206 said...

House prices fell for the 9th straight month!

Existing Home Sales Slowing to a trickle!

I remember when people like you were called Chicken Little not too long ago.

I'm just happy that sanity is returning to the markets.