"Affordable Housing," Free Market Style - Chapter 3
The L.A. Times reports, "The nationwide median price of new homes sold in September fell about 9.7% from the same month last year to $217,100, according to the Commerce Department.""On a regional basis, new home sales in the West fell 13.6% in September compared to same month last year."
Adam Smith, invisible hand, supply, demand and migration -- need I say more?
Here's the rest of the story: http://www.latimes.com/business/la-102606homes,0,2812005.story?coll=la-home-headlines
Posted by Walter Moore @ 10/26/2006 05:20:00 PM
2 Comments:
Walter, please, the median price and the drop in sales do not equate - as in apples and oranges.
And if you think it is bad now, wait until after the election - no matter who wins.
The markets both housing and stock are so bloated and inflated they remind me of that picture on the Bustamante post.
With all due respect, let me lay some Econ 102 on you.
The increasing inventory of unsold units is nature's way of telling sellers: "you're asking too high a price." The increasing number of unsold houses is therefore a prelude to a drop in prices.
The fact that prices are, in fact, dropping, shows that the price drop is already underway.
If I were you, and wanted to make a better argument, I would point out that the decline in prices nation-wide does not necessarily translate into a price drop in our particular market. The response to that, however, is that the ever-increasing inventory locally is the prelude mentioned above.
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