Prices for New Homes Deflating?

Numbers out yesterday on sales of new homes. While the headlines focused on the surprise increase in sales (a volatile number with great statistical uncertainty), less attention was paid to the prices paid for new homes.

December 2004 Median Price: 229.6K
December 2005 Median Price: 221.8K
Percent Change: -3.3%

December 2004 Average Price: 284.3K
December 2005 Average Price: 272.9K
Percent Change: -4.0%

Those are YOY declines! Granted the decrease in prices reflects in part the sales weakness in the West (which has highest prices), but this is a stunning development, and one conveniently ignored by most interested parties.

A graphical summation of the trend from Calculated Risk: