NAR: 'Great Depression'-Like Collapse in Home Values

The usually positive National Association of Realtors struck a decidedly downbeat chord at its annual convention in Orlando, predicting that housing prices would fall this year by the largest percentage since the Great Depression. Lawrence Yun, NAR's chief economist, said the average sales price of existing homes would slide 9.8% in 2008, "by far" the sharpest decline since the group began keeping records in 1968 and "probably" since the Depression. The record for the largest decline was set last year, when the average slipped a mere 1.4%. For 2009, NAR is expecting prices to go back up by 1.1%. But Mr. Yun told reporters that the slight increase is akin to "essentially no change." By 2010, though, the group is expecting price appreciation to return to the historical norm of 4-5% as the inventory of unsold houses returns to normal. "We have hit bottom, we believe, in terms of sales activity," he said. "But not prices. The only way to stabilize prices is to get inventory down, and we're not there yet."