US: Largest home price drop on record.

Ouch. Todays CNNMoney has an article about the fourth quarter report from the National Association of Realtors showing the largest price drops on record with price declining US markets now outpacing those with gains.

The most recent median prices are down even more: 3.4 percent since hitting record highs in the second quarter. Almost three-quarters of the markets, reported on by the group, saw declines in median prices over the past six months, with eight reporting double-digit declines.

Vacation markets, where investor-buyers had driven up prices during the building boom of 2005, were particularly hard-hit.

The Sarasota-Bradenton-Venice, Fla., market saw the biggest year-over-year decline in the fourth quarter, with prices plunging 18 percent.

When looking at the change between the fourth quarter and the second-quarter peak, the Palm Bay-Melbourne-Titusville, Fla., market saw the biggest drop, with median prices plunging 19.5 percent.

Wow. Those are mind-boggling price drops in a time of super-low interest rates and a strong economy. It remains to be seen how bad the US housing slump will get, and what effect this will have on the economy as a whole. For now the NAR is repeating their mantra "I think the worst is over".