Finding bottom

Three years after the housing crisis began, and the market still is trying to find bottom. Figures released this week show the sales of existing homes reached its lowest level nationally in nine years in February, a 9.6 percent decline over January, which had been the third straight month of progress. (Read about it here.)

Reuters says existing home sales make up 90 percent of national sales. Foreclosures and short sales were up slightly in February, as well. Meanwhile, the median home price fell by 5.2 percent from a year ago, putting it at its lowest level since 2002. Some of this may have been due to bad weather, which hampers sales, but that doesn’t fully explain it.
The good news in all this is that it is getting easier for first-time buyers with steady incomes to buy a house. But as long as prices keep falling, those people understandably will be reluctant to jump in.
Falling home prices make it more difficult for state and local governments to make ends meet, as they rely at least in part on property taxes that are tied to home values. This is leading to calls in some places for an overhaul of traditional tax systems.
Government incentives clearly haven’t stopped the slide in home prices (the market seems to be different in various parts of the country, however). There may be no better solution available than to just leave the market to its own devices, hoping it bottoms out soon.