“Bay State median house-sale prices fell 9 percent in August”

Yesterday’s Boston Herald reports:

Home prices fall 9%

Bay State median house-sale prices fell 9 percent in August as the real estate slump hit Cape Cod and central Massachusetts especially hard, new figures show…

Warren said just 2,302 condos changed hands last month – a 22.4 percent drop from August 2007…

Also yesterday on Bloomberg:

Home Resales in U.S. Fall 2.2% to 4.91 Million

Sales of previously owned U.S. homes fell more than forecast in August and prices dropped the most on record, a sign the market remained in a slump heading into the latest financial meltdown…

“The headwinds facing housing have intensified,” Peter Kretzmer, a senior economist at Bank of America Corp. in New York, said before the report. “Delinquencies and foreclosures continue to rise while credit conditions remain tight.”

…The median price of an existing home dropped to $203,100 from $224,400 a year ago. For single-family houses, the median price dropped 9.7 percent, the biggest decline since records began in 1968…

The Northeast suffered a 6.6 percent decline in sales, followed by a 5.3 percent drop in the West…

Today Bloomberg reported on new-home sales:

U.S. New-Home Sales Fell in August to Lowest Level in 17 Years

Sales dropped 11.5 percent, more than forecast, to an annual rate of 460,000, the fewest since January 1991, the Commerce Department said today in Washington…

…The median price of a new home dropped 6.2 percent from a year earlier to $221,900, the lowest level since September 2004…

…the supply of homes at the current sales rate rose to 10.9 months’ worth from 10.3 months…

New-home sales dropped in three of four regions, led by a 36 percent slump in the West and a 32 percent decline in the Northeast…

See also:

New York Times: “Will the Fed Reverse the Housing Slump?” (9/19/08)
In 2000, the median home cost about $130,000, roughly three times the typical household income — almost precisely the ratio that had held since the ’60s.

Then came a real estate boom unlike any before it. By last year, this ratio of prices to incomes had suddenly shot up to 4.5. For it to return to its old level, home prices would have to fall by an almost unthinkable one-third, and probably more in California, Florida and the Northeast…

Mark Zandi, chief economist of Moody’s Economy.com, ran an analysis for me this week in which he looked at home values, mortgage rates, tax rates and incomes going back to 1968. Taking all these into account, he found [today’s] prices were about 20 percent too high.

New York Times: Downsides of Owning a Condo in a Downturn (5/15/08)