Home Prices in U.S. Slid 12% in Fourth Quarter, Most on Record
By Kathleen M. Howley
Feb. 12 (Bloomberg) -- Home prices dropped the most on record in the fourth quarter as foreclosures dragged down values and the recession pushed buyers out of the market.
The median price of a U.S. home declined 12 percent to $180,100 from a year earlier and sales of properties with mortgages in default accounted for 45 percent of all transactions, the Chicago-based National Association of Realtors said today.
What's a reasonable bottom?
A few posts back I mentioned a website that suggested one oughtn't pay more than 2.5 times one's household income for a house.
In 2007 the median household income of homeowners was $61,581. This suggests that the median home price ought be about $154,000 (2007 dollars). Adjusted for inflation, this is just under $158,000.
I'd guess we have a ways to go before housing prices reach a natural bottom.