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Home prices have fallen steadily since July 2006, but plunged even more steeply in the third quarter,which covers 20 local markets and a national average, third-quarter home prices dropped 1.7 percent from the second quarter.

The housing market could possibly get a lot worse.He was asked at a press conference following the release of the latest index data whether housing price increases, which had far outstripped income gains, could revert back to more normal ratios.

The index, which many experts consider the most accurate snapshot of home price trends, revealed that prices peaked in the summer of 2006 and have fallen 5 percent since then.

Home price growth started to slow in November 2005 and turned negative in August 2006.

Of the 20 markets covered, 15 showed negative returns and all 20 had negative returns for September, compared with a month earlier.

Worst hit was Tampa, Fla., where prices fell 11.1 percent compared with a year earlier. The second biggest loss was in Miami, where prices fell 10 percent from a year earlier.

Charlotte, N.C. and Seattle showed the highest year-to-year gain of 4.7 percent each. But Charlotte declined 0.6 percent in September and Seattle prices fell 0.2 percent.

The housing cycle is very important to the business cycle, according to Shiller. Most economic recessions are preceded by housing declines and residential construction is an important leading indicator for the economy. The weakness in the housing market is causing him to wonder whether the nation could slip into recession.

Most economists are still optimistic; employment is strong, consumer spending robust and the weaker dollar has increased exports. But, there’s a big question in his mind whether subprime problems will lead to a retrenchment in consumer demand.

The current situation is unprecedented - there’s never had been a housing boom quite like the one that ended last year - and how we come out of the bust is anyone’s guess. If you are thinking of purchasing a Home For sale In Atlanta do not let this scare you, it really is a time to purchase because there are some really good deals out theere now.

Posted on December 1st, 2007 by Dwayne
Filed under: Uncategorized