Housing Bubble Is Officially Deflated

If there was any doubt that the housing bubble has cooled, I think we can safely say that is no longer the case.

Many homes for sale in this area are now on the market for a considerably longer time, and of those many sellers have dropped their asking prices in an effort to sell their homes. The days of 12% to 18% annual appreciation in home values are over and more realistic prices are being seen. It is now a buyer's market and that is what's driving the drop in prices.

There's a hissing sound in the air as the balloon carrying the real estate bubble higher and higher seems to have developed a small leak and is gradually settling down from the giddy heights that it reached in the last few years.

Signs of the return to earth, or at least lower elevations, are abundant along the roadsides in the area where For Sale signs are more likely to say ``price reduced'' or ``newly priced'' rather than ``under agreement'' or ``sale pending.''

It is reported that average home prices have dropped between 8 and 10 percent in central New Hampshire compared to last year, showing a trend towards more realistic housing values. Not all segments of the housing market in New Hampshire have seen the drop in prices. Upscale homes in the $300K to $600K range are still selling well, though not at the rate they were last year.

From looking at a large number of present listings in central New Hampshire, it seems that homes are on the market for six months or more before selling. From my own observations I can say it seems that a large number are on the market for far longer than that. Many homes in my town alone have been on the market for a year or more. While some of these are seasonal homes, meaning that the pressure to sell isn't nearly as great as for someone selling a primary home, it is still indicative of a weakened housing market.

The housing bubble has indeed inflated and isn't much more than a memory.

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