US property prices end freefall

Tuesday 19.08.2008 (25 months ago)
USA :: Property News

The median existing-home sale price surveyed in the United States by the National Association of Realtors in June was $215,100 which is 3.5 per cent higher than the median price in May - and that price, was 3.3 per cent above the price in April. Which means that US house prices, which most believe to be in meltdown, have in fact increased over the past four months, after reaching a bottom of $195,600 in February.

There are of course strong seasonal factors in house prices. And the NAR cautions that the index should be used for year-on-year comparisons.

However, at the same time, the inventory of homes for sale was steady at 4.49 million homes, calculated at 11.1 months of supply, down from the supply level in April.

In Britain and much of Europe, house prices, which are still above historical averages than in America which have only started to fall recently, are suffering a rapidly accelerating rate of decline. The oversupply of unsold housing is growing by the day.

The housing correction - and the credit crunch - appears to be at or close to its low point in America. However, in Britain and the rest of Europe the trouble has only just started.

Of course, some analysts disagree with the figures. But the NAR index is the one indice both sides of the Atlantic with the longest statistical history and most timely of all the indicators of house prices. And despite the cries of financial doomsday from many economists and analysts, signs of stabilization are starting to appear in US housing statistics.

However, the markets have yet to pick up on these figures. And certainly the dark clouds looming over the UK and European markets will cast a shadow over what should be, positive news.

© Prime Asset Investments Ltd.