When housing becomes unaffordable...

[73ss454]

Originally Posted by TromboneAl

Al,

That's not you is it? Did things get that bad that fast?

[Delawaredave]

Originally Posted by 3 Yrs to Go

The other thing that happens when housing becomes unaffordable.

"Neuhart said he would expect the median price of homes sold to soon start showing a year-over-year decline, although he said that doesn't mean that overall home values would be declining."

Median house price stuff confuses me.* New houses added to supply are generally larger/more expensive to existing base - correct ?

If all existing houses theoretically stayed the same for a year, the median house price for an area still would go up - because of new, more expensive supply - correct ?

For above quote, for median to drop - that has to mean that existing houses had to have dropped - correct ?

[Andre1969]

Median house price stuff confuses me. New houses added to supply are generally larger/more expensive to existing base - correct ?

That line in the article confused me too. I think what they're trying to say though, is that while the median home price will drop, that's just the price point at which 50% of the homes sold are more expensive, and 50% are less expensive. With home prices rising, interest rates rising, etc, it's going to put a crimp in sales of more expensive homes, while more cheaper homes might sell.

The values of any specified property will stay the same or rise slightly, but the mix of cheaper to more expensive properties will change, skewing the median. I don't believe for a second though, that values are going to keep rising. While some people may just get frustrated and take their more expensive homes off of the market, others are going to be desperate to unload a house they can't afford, and are going to cut it at a loss.

[youbet]

Originally Posted by Delawaredave

"Neuhart said he would expect the median price of homes sold to soon start showing a year-over-year decline, although he said that doesn't mean that overall home values would be declining."

Median house price stuff confuses me.* New houses added to supply are generally larger/more expensive to existing base - correct ?

If all existing houses theoretically stayed the same for a year, the median house price for an area still would go up - because of new, more expensive supply - correct ?

For above quote, for median to drop - that has to mean that existing houses had to have dropped - correct ?

It could occur because more lower value houses are selling and higher value houses are not. This despite owners not having reduced the prices they are asking. He's talking about the median value of houses that actually sold, not the median value of all houses in an area.