Home Sales Record First Drop On Record

The median price for a homes dropped 1.3 percent to $219,000 in 2007, while total home sales plunged by 13 percent for the year.

Prices of homes sold in December registered the biggest year-over-year decline on record, according to a report from an industry trade group, and 2007 is the first year on record that has seen a drop.

The National Association of Realtors (NAR) said on Thursday that the median price of homes sold in December fell nearly 6 percent from a year earlier to $208,400. The three biggest declines in prices ever recorded have now come in the last four months.

In addition to the December price decline, NAR reported the median price for all homes sold in 2007 fell 1.3 percent to $218,900, the first time that the annual price reading has shown a decline since the group started tracking that measure in 1968.

Now that we have definitive proof that the housing market has collapsed, what next for beleaguered homeowners? The problem is that this will effect all aspects of the economy. Do you think they will be building homes in Florida with foreclosures on every block? Do you think homeowners will be remodeling when their homes are declining in value?

What about those that lose their jobs as a result of this mess? How many of them will wind up in foreclosure? Do you understand now why this is bringing down the economy?