U.S. Home Sales Decline for Fifth Month
For the fifth month in a row sales of existing homes fell in the United States with prices below last year's level for the first time in more than a decade. This drop has led many economists to predict that the real estate market may be near to bottoming out.

As reported by the National Association of Realtors (NAR) the sales of existing homes fell from 6.33 million units in July to 6.30 million in August. While this 0.5 percent decrease was the smallest decline of the last five months, prices have also begun to shift downward. The median sales price fell off 1.7 percent from August 2005 to approximately $225,000.

For many years owning a home in the United States was regarded as a primary growth investment, often anchoring the financial foundation of individuals and families. The chief economist for the NAR predicted a continued price drop in the short term. He emphasized, however, that the real indicator of market strength lies not in prices but in number of transactions.

Since Wall Street had predicted the pace to fall to 6.18 million units, real estate pundits take the 6.30 million level as a positive sign saying that if the bottom has been reached, a rebound will occur in coming months and that the housing market will not face a hard, crash landing.

Analysts are quick to point out however, that "rebound" may mean stabilization at current levels only and not substantive price increases. Real price appreciation may be several years away meaning home owners wanting to sell will not realize the high gains on their real estate investments they would have seen in the recent past.

Given other economic indicators in the United States, this is a source of concern to home owners who are looking at lower sales prices and longer "on the market" periods.