As the housing market crisis continues, existing home sales fall and prices drop along with them -- especially for homes that have been on the market for a while. The New York Times reports on existing home sales for the month of April:
Sales of previously owned homes, which make up the bulk of the housing market, dipped 1 percent in April, to an annual rate of 4.89 million, the second consecutive month that sales have declined.
Additionally, as inventory rises, home prices are more likely to fall. Calculated Risk reports on what home prices are doing:
[I]t appears real prices are flat with about 6 months of inventory - prices rising with less than 6 months - and prices falling with more than 6 months. So perhaps we could argue house prices will fall until Months of Supply declines to close to 6 months.
I find it interesting that home prices are rising for those that have been on the market for less than six months. It indicates that there is a certain level of optimism for those just getting their homes on the market. However, things change the longer a home has been on the market.
Let this be a lesson to you as you are buying a home: Look for a home that has been on the market for a while. The seller is more likely to negotiate with you.
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