Home Sales Number Shows 11% Price Drop

June 25, 2008 9:38:52 AM PDT
Commerce Department released new home sales numbers on Wednesday; and though last month's new home sales dropped compared to last year, it's still good news for homebuyers.One man's foreclosure is another man's treasure. Let's take the 21-year low in housing prices for example; with the price of a single family home dropping 11%, it's great news for homebuyers.

Good Morning America Financial Contributor Mellody Hobson said, "People are snapping up the bargains, which is why we see the existing sales go up. If you're a seller, you're not going to get the price you're hoping for, there's no question about it; at least people are buying."

In cities like Las Vegas and Miami, housing prices have dropped more than 19% percent in a year. Phoenix, an 18% percent fall and for Los Angeles and San Diego, it's been a sharp and steady 16% percent decline. Double-digit losses from Detroit to San Francisco to Tampa.

David Wyss, Chief Economist with Standards & Poor's said, "We are in the middle of a recession. I think the good news, the housing data suggests that the lower prices are starting to bring bargain hunters out."

Another bright spot in the American economy? American exports.

That's good news for Americans who work for companies that sell those products and for Americans who invest in them.

According to some analysts, a weaker dollar can actually assist the American industry and help to avoid a recession. Simply put: low dollar value means us exports go up. "So we've seen the agriculture states doing much better, Indiana, Iowa, Nebraska, North Dakota, Kansas; those states are benefitting from the rising commodity prices, specifically, wheat, corn, soybean, they're booming," said Hobson.

While spring is often regarded as the height of selling season, some analysts said we may not see any significant improvement until well into the summer.


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