U.S. Home Prices Fall For 3rd Straight Qtr

A: Nothing new here and the trend continues. Outside of Manhattan, housing stinks. According to the NAR, the latest data reveals that the median price of a home in the US fell 1.8% to $212,300. It was the third consecutive quarter of decline. Here in Manhattan, the lag is yet to hit.

According to CNN Money:

The home price report revealed a broad but shallow pattern with prices declining over every region but by no more than 2.8 percent, which occurred in the Midwest.

The first-quarter drop follows an overall 2.7 percent slump in the fourth quarter of 2006, which was the biggest year-over-year drop on record.

NAR President Pat V. Combs said in a statement that the flattening in home prices is encouraging.

"It appears the worst of the price correction is behind us," she said. "More stable home prices and declining mortgage interest rates are increasing buying power, which should encourage potential buyers who've been on the sidelines."

Don't be fooled by the NAR's always optimistic view and the legacy left behind when David Lereah stepped down. Outside of Manhattan, home prices are in the midst of a correction and no one knows what might be the surprise that reveals itself and results in either a turnaround or a downright crash.

Fundamentally, there is no end in sight and with housing being such an illiquid investment, the market as a whole will take time to turn the corner. Keep an eye on jobs, consumer spending and interest rates to see how both the economy and the housing market will hold up in the near term.

As far as Manhattan is concerned, the lag is yet to hit. Historically speaking, after Memorial Day the buyer activity tends to die down significantly. I'll report as I see it to see if this summer is any different.

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