Interesting news the other day out of the Commerce Department and reported in the New York Times about new-home prices: The median price (the statistical point where half the houses are priced less but half are priced more) of a new house nosedived 9.7 percent last month when compared with the same month one year earlier. That price, by the way, is $217,100. The decrease represents the “biggest such drop since December 1970,” reports the Times. Now on the positive side, of course, this means new homes are available to buyers at cheaper prices than before. But, the larger picture, some experts say, is one of an economy that may be in for some turbulence ahead.

As the paper points out in an article by Jeremy Peters, the folks who build new houses are just trying to keep ahead of a market that seems to be weakening with each passing day. It was only two months ago when the new home prices were still on the rise.

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Tags: commerce, department, drop, housing, median, New, price, prices, Times, York

The National Association of Realtors today reported that the median home price in the US fell in August to $225,000 down 1.7% from August of 2005. This is the first time a year over year decline in median home prices has occured since April 1995.

According to The New York Times: “David Lereah, chief economist of the association, said he expects prices to continue to fall. “We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market,” he said in a written statement. “This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”

At the end of August, there were enough unsold, previously owned homes on the market that it would take 7½ months to sell them all at the current sales pace. The association said that was a bigger backlog than at any time since April 1993.”

Hear that? That quiet hissing sound you’re hearing seems like the beginning of a deflating bubble . . .

Tags: association, bubble, home, median, national, prices, Realtors