US property prices decline to long term norm

New information from the National Association of Realtors in the US shows that property prices are getting back to the long term normal rates quickly.

As home prices fall in the United States, some see this as a poor sign, a problem and often a financial crisis. Yet for property investors, knowing that property prices are falling should peak an interest. Even more interesting is the fact that prices have fallen quickly, to the point of reaching a long term normal price.

Home valuations (which are the difference between what a home should cost and what it is actually priced at) have fallen quickly, to the lowest levels they have been at since 2004.

This comes in from National City Corporation, who is a major lender in the country. With the help of financial analysis firm Global Insight they showed in a report released on Tuesday that more than 88% of the 330 housing markets within the United States that were part of this survey shows a significant price decline. Additionally, they saw improved affordability during the final three months of 2007.

Affordability is the best it has been in the last four years. According to chief economist from National City, Richard DeKaser, as reported by CNN Money, "This isn't to say home prices declines are over. We could move below historic norms. By the end of 2008, housing markets could be broadly under valued."

Additionally, the Mortgage Bankers Association also provided data that showed that the failing loans rate (which hit record highs in 2007) was due to the increase of subprime borrowers who were unable to make their payments.

One indication of stability on the horizon was the number of pending home sales. These saw no change in January (as compared to previous drops).