Home Prices Roll Back

HOME PRICES ROLL BACK TO 2004 LEVELS... Sales data for the first quarter has arrived and for March specifically, prices have hit the 2004 watermark.  That means the median price is down almost 20% from a year ago.  Both the Los Angeles Times and the Orange County Register reported the Dataquick findings.  Obviously a huge contributor to price adjustments is the absorption of bank owned properties that are finally matriculating into the general real estate population.  The other factor is that sellers that previously were "testing" the market have wisely taken their homes off the market and only serious sellers remain.  That means that motivated sellers realize that their home must be priced to sell and that it will have competition from the bank owned sector. According to Dataquick, the bank owned property typically sells at least 15% below "normal" market prices.  Although it could be argued that the housing downturn is artificially deflated because of the bank owned properties, this writer does not agree.  That's like saying if you hadn't driven the car, you wouldn't have gotten in the accident.  Bank owned properties are germane to this market and will be here for some time.  This is not an overnight correction as people are beginning to realize.  Don't misunderstand, there is light at the end of the tunnel.