I've said it before, and I'll say it again: In housing, prices lag sales, on the way up and on the way down. Recently we've been getting a lot of bullish news on home sales, with both pending and existing home sales up toward the end of the year and expectations that December will continue that trend.
So why are prices down?
Financing and fear.
Both Zillow and CoreLogic reported home prices down just over 5 percent in November year over year, and the price drops are accelerating month to month (of course this is the slowest season). While Arizona, with all its overbuilding and foreclosures, leads the nation in price declines, some surprising cities led the drop. Chicago home prices were down 6.6 percent, Atlanta down 6.2 percent, Philadelphia off 4 percent, according to CoreLogic. These were not exactly bubble markets, but they are seeing higher foreclosure numbers, and that is likely bringing down prices. It is also becoming more expensive to get a loan, and that extra expense may be coming of selling prices.