L.A. Times: Home prices take steepest dive in 35 years

You've probably heard the news by now, but we'll note it here for the record, even though this is not news specific to our region. On a national level, September new home prices have taken their biggest YOY drop since 1971. The national median price has dropped 9.7% to $217,000 (oh if only we had those prices in California). Sales volume is also down 14.2% YOY.

And what's more, previous months keep getting downwardly revised. And on top of that, even the revised numbers do not reflect contract cancellations! Pretty scary, isn't it, when you consider the new cars, vacations, pools, granite countertops, cash back, and other gimmicks that builders throw in there to keep from lowering the asking price. And what's weird is that we've barely begun to really see the noticeable effects from this decline yet. It is just warming up. Do the bottom-boosters still think this market has bottomed?

One point of interest to me is that the article states that there were "signs of improvement", noting that September sales were up from August. At this stage in the downturn, it appears the psychology is such that people are still hopeful this will all be over soon, and they are digging through piles of horse manure looking for diamonds, which may turn out to be zirconium. This improvement cited is meaningless anyway, since the figures keep getting downwardly revised later.

Check this October 26, 2006 story by Jesus Sanchez for further details.