Existing Home Sales Down 1.7% Nationally

Not surprising the NAR release it's existing home sales data which reported a 1.7% decrease in the median home price.

This is the first drop since 1995 and is the largest drop since 1993. This is pretty significant news especially for those currently in the market, buying or selling.

I have a feeling that in two months you will see an even more dramatic slowing as this will psychologically take it's toll on buyers. They will begin to submit lower offers based on this information and the media will jump all over it further decreasing buyer moral.

Combine this will 9 trillion in adjustable rate mortgages that will adjust in 06-07 and you can see additional downward price pressure as foreclosures may become a bigger issue. This may bode well for "for sale by owner" home sellers as they can price more aggressively offering a win/win with buyers.

There was a blog post on Trulia about what real estate professionals thought was going to happen. Looks like Jonathan Miller ( a real estate appraiser and great blogger) was the only one even close regarding the existing median price.

Will this downward trend continue?