Housing market in America starts its steep slide

For the first time in 11 years, no longer is the rate of growth in housing prices merely flattening...now house prices are actually going down! The USA Today headlined the story "After 11 years, home prices fall." Here's the Reuters' report: "The pace of existing home sales in the United States fell for a fifth straight month in August and prices dropped from year-ago levels for the first time in more than 10 years, a realtors group said on Monday. "While the report offered a fresh sign of cooling in the U.S. housing market, the sales drop was not as steep as expected on Wall Street, where economists had looked for the pace to slow to 6.18 million units. "The report, however, did show prices have begun to drop when compared to the lofty levels of last year. The median price dropped to $225,000, off 1.7 percent from August 2005 and the first annual fall since April 1995. "In addition, the stock of unsold homes on the market rose 1.5 percent to 3.92 million units. At August's sales pace that represented a 7.5 months'supply, the highest since April 1993." Here's a brief comment from the financial newsletter The Daily Reckoning: "Tech stocks could go down without doing much damage to the broader economy. You win some; you lose some; that's just the way it goes. But housing is too important to lose. Too many people count their blessings in housing. Too many people depend on it. Too many people have too much of their wealth tied up in the roofs over their heads. And too much of the nation's GDP is linked to the bubbly housing market." We've spoken to several Mid West realtors in recent days and the tale they tell is worse than that being reported. Once thriving communities are overhung with homes on the sales and rental markets. "Very soft," is how one lady called the market. Huge new homes need huge loans to buy and cost even more to run, in utility costs and ;local taxes. The crash is coming: our new book called Goodbye America, Goodbye Britain has a chapter on "The coming foreclosure tragedy." Things are going to get a lot worse....


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