February 26, 2008 | posted by Michael Baxter in House prices, US economy |

And from Blighty to Uncle Sam. Much has been written about the sorry state of the US housing market, but there has been a paucity of solid stats.

Yesterday, the National Association of Realtors released its latest set of data on existing home sales.

January saw the lowest level of sales for existing homes in ten years; there are now enough homes for sale in the US to meet 10.3 months of demand, and as for the median price of US homes, this is now down 4.6 per cent from the year before.

That all sounds bad, but actually, the real story is even worse.

During the first few months of last year, house prices in the US were still rocketing. If we compare median price with the price seen in June, then actually prices have fallen by 12.2 per cent.

Take into account the massive level of inventory – there are now 18 per cent more existing homes for sale in the US than there were a year earlier – while at the same time sales in January were 23.4 per cent down on the year before.  So stocks are near an all-time high and demand has fallen dramatically; you know what that means for price.

Of course, in the US, some regions perform better than others. For example, the north east is still enjoying year on year house price growth – while the south has seen prices fall by 6.7 per cent over the last year.

But, if you look at the fall from peak to today, then the woe seems pretty widespread, with the north east seeing the best performance, with prices down 7.6 per cent, and the west bottom of the pecking order, with prices down 14 per cent.

Perhaps even more disturbing, house prices are now beginning to look weak even in comparison with 2004. Across the US, prices are still up, just – 2.49 per cent, but in the mid-west and south, prices are now even lower today than in 2004.