Median home prices continue to plunge as reports showed a drop in January from $199,800 the previous year to $170,300 that month. This is the lowest median price on record since March 2003. New home sales continued to drop in January to 330,000 units, but the drop in sales for existing homes dropped suddenly last month to the lowest level in 12 years. This is attributed to potential buyers holding on to investments for fear of losing their jobs due to the still struggling economy. The drop in prices is also attributed to the Arizona, Florida, Nevada, California and other foreclosures by state flooding the market, as well as from other distressed properties in other states.

These signs look grim fro investors who are waiting for signs that the economy has slowed down its dive. However, economists are still seeing the numbers to be hard pressed in showing recovery. Reports from Wall Street show demand for goods like cars, appliance, furniture and other goods fell for the sixth straight month in January. Government reports show durable goods and manufactured products show declining orders.

In the housing market, even with foreclosures by state and other distressed properties swamping the market and causing a tremendous drop in home prices, sales of existing homes continue to fall by 5.3 percent, and are considered the weakest level since July of 1997. Sales have been dropping as thousands of Americans lose their jobs every week, with employers drastically cutting down on their payrolls.

More than 235,000 workers lost their jobs last month, which is up to almost 5o percent from the same period last year. The Labor department said that the cuts could get worse in the next coming months.

In an optimistic outlook, home sales demand could increase even as home prices continue to plummet. The $8,000 tax credit roll out for first time buyers could account for this foreseen increase in sales. According to some realtors, banks are finally becoming realistic and have started accepting offers on some of the Nevada, Arizona, Florida, California and other foreclosures by state and other distressed properties.

The tax credit would be an immediate response to the current home crisis according to Treasury Secretary Timothy Geithner. This could help reduce the large supply overhang in the market brought about by foreclosures by state and similar properties. Still, even with government help, people and consumers are still on standby mode.