“THE EXPERTS ARE SAYING THAT IT’S A BUYER’S MARKET AND THAT HOME PRICES HAVE FALLEN WITHIN THE LAST YEAR. BUT HAVEN’T HOME PRICES ALWAYS GONE UP? HOW IS THAT CONSIDERED BUYER-FRIENDLY?”

Actually, home prices have not fallen in the past year—at least not nationally. Home prices have indeed always increased (since World War II), but the rate of increase has not. According to the National Association of Realtors®, in the second quarter of this year, median home prices for single-family homes were up 3.7 percent from the second quarter of 2005. By comparison, the increases during the four quarters of 2005 were 10 percent or more each quarter. However, keep in mind that these figures are national figures. While some markets did have an increase in home prices, many markets saw a either a drop in prices or little or no increase in the second quarter. For example, the Detroit market had an 8 percent decrease in home prices while the Grand Rapids market had only a 1.9 percent decrease. Overall, although the national figures do show a slight increase in home prices, more areas than before have seen a decrease—and some of theses decreases are quite dramatic. In the end, the reason the experts consider the current market to be “buyer-friendly” is because of this slowdown in the rate of escalating home prices.  ∆