Housing Prices Drop in Second Quarter, But Not By Much

The National Association of Realtors reported today that home prices dropped by 1.5% from a year ago although sales dropped by 10.8% compared to the second quarter of last year. In addition, the report showed that many markets saw price appreciations instead of drops. Salt Lake City saw a price appreciation of 21.9%.

To me, the data seems to show a spotty housing market with some overbuilt areas feeling the pain while other areas seem to be doing fine. In general, I feel that as long as the job market stays robust then the housing market will avoid a major collapse. Housing is one of the last things someone wants to lose. Although the increases in ARMs will cause some pain an overall healthy economy should keep the market fairly stable.

If the economy slips into recession or the unemployment rate increases though, all bets are off.