Here's how its being played in the WSJ:
"Yesterday's report also confirmed home prices are coming under pressure. The median sales price of an existing home was $225,000 in August, down 1.7% from a year earlier. That was the first year-to-year price decline since 1995 and the second sharpest in the nearly 40 years the data have been collected.
Prices fell faster for condominiums than for single-family homes. In August, the national median price of a single-family home fell 1.7% from a year ago to $225,700. The median price of an existing condominium fell 2.4% from a year earlier to $223,200. . .
Falling prices have a flip side. If their homes are worth less, consumers may feel less wealthy and therefore spend less on goods and services, a worrisome trend for the broader economy. "We have to acknowledge that this is a clear risk to the consumer," said Haseeb Ahmed, U.S. economist at J.P. Morgan Chase & Co. In the short term, he said the recent drop in gasoline prices should offset the effect of declining home values."
"At a pace that some analysts described as "astonishing," the price of existing homes declined nationally for the first time in 11 years in August, signaling that the long-awaited other shoe has finally dropped on the real estate market.
Home sales have been slowing for months but sellers appeared to be holding out to get their price. Now the pressure to sell is intensifying, leading to a drop in house values across the country."
The issue that has Economists worrying is the "housing slump's ripple effects. Even as the boom began to wind down last year the housing market probably contributed about $2 trillion to the U.S. economy, according to the National Association of Realtors. One estimate from Goldman Sachs predicts that the slowdown will cut 1.5 percentage points from the nation's economic growth in 2007."
Two other comments via the Trib:
"It's pretty amazing how fast the reversal has occurred since last year," said David Stiff, chief economist at Fiserv CSW, a property-data analysis firm in Boston.
"There has never been such a quick deceleration in price appreciation," Stiff said. "I was looking at data from 1969 forward, and it's unprecedented."
Bloomberg noted that "Home construction in the second quarter subtracted more from economic growth than at any time since the first three months of 1991, the Commerce Department said."
But the key issue remains the impact on consumer spending. Joseph Stiglitz had the money quote on this:
"What worries me is how long we can sustain consumption on the basis of what we have sustained it in the last several years: by taking money out of your house,'' Joseph Stiglitz, Columbia University economics and Nobel laureate, said in an interview Sept. 22."
Here's yet another chart of price changes, along with regional prices.