(NaturalNews) The housing market continued to take a beating in the last quarter of 2006, as home sales fell in 40 states and the national median price fell by another 2.7 percent compared with the year before. Large numbers of unsold homes make it likely that the depression in price will continue.
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What you need to know - Conventional View
• A five-year-long boom in the housing market ended in 2006, when sales and prices began to drop. Mark Zandi, chief economist for Moody's Economy.com, attributes the slump to layoffs in the industrial Midwest and excessive price inflation by speculators in Florida and the West.
• According to the National Association of Realtors, the biggest declines in sales in the fourth quarter were found in Nevada (36.1 percent), Florida (30.8 percent), Arizona (26.9 percent) and California (21.3 percent).
• In all, sales declined in 40 states, increased in six and remained unchanged in one (Utah). There was insufficient data to draw conclusions about Idaho, New Hampshire or Vermont.
• Nationally, the decline in sales was 10.1 percent.
• The national median price for the fourth quarter of 2006 was $219,300, which was 2.7 percent lower than for the same period of 2005.
• Quote: "The price declines we are seeing are extraordinarily broad-based and just symbolize how significant a price correction we are in." - Mark Zandi.
What you need to know - Alternative ViewStatements and opinions by Mike Adams
• This correction in the housing market was inevitable, considering the rise in speculative buying and inflated home prices following the dot-com bust.
• People still continue to view their homes as ATMs that generate endless cash for spending, but home prices will suffer a severe correction, and the U.S. real estate market could actually be due for a long downward trend.
Bottom line• Sales of houses were significantly lower in the last three months of 2006 than in the last quarter of the previous year.