There are several stories for you embedded in
today's new home sales figures.
New home sales fell to a 13-year-low last month. But the encouraging news is that inventories have dropped. That's a signal that builders are starting to move some of the glut of homes they have been sitting on. They have had to lower prices to move the overstock.
MarketWatch reports:
The inventory represented a 9.8-month supply at the February sales
rate, unchanged from January and the highest since 1981. The median
sales price fell 2.7 percent in the past year to $244,100.
See a regional breakdown
here.
On Monday, the
National Association of Realtors said existing home sales actually rose last month, but even with that, sales were 23.8 percent below the 6.60 million-unit level in February 2007.
Reporting the storyCheck with local painters, kitchen contractors, lumber supply centers, electricians. They all are looking for work. I remember a couple of years ago you could not get an electrician to even speak to you about a small job at your house. Now they show up the next morning.
Judging the marketThe question keeps coming up, "Is this the bottom? Is NOW the time to buy?"
The Wall Street Journal explains that the current market could make homes affordable to working folks -- except that the housing pressures are not the only problematic part of the economy:
Foreclosures also can help bring prices in
high-cost areas down to levels that are affordable to teachers, fire
fighters and other middle-class buyers who may have been priced out of
the market during the housing boom.
U.S. Rep. Barney Frank, a Massachusetts Democrat,
recently announced plans for legislation to provide $10 billion of
federal loans and grants to help local government and nonprofit groups
buy and renovate vacant foreclosed homes. The homes would have to be
sold or rented to people with low or moderate incomes.
The overabundance of foreclosed homes in the market is
likely to push down home prices in much of the country for the next
several years, says Ivy Zelman, chief executive of Zelman &
Associates, a housing-research firm in Cleveland.
Until recently, all of this distressed property has
been encouraging potential buyers to stay on the sidelines in
anticipation of lower prices later. But Lawrence Yun, chief economist
of the National Association of Realtors, says the latest data show that
sales are perking up in some areas where owners of foreclosed homes
have become more aggressive about their pricing.
Prospects for the housing market also depend heavily
on the job market. As measured by the S&P/Case-Shiller national
index, home prices jumped 74 percent in the six years through 2006. During the
same period, U.S. median household income rose just 15 percent. (Neither
figure is adjusted for inflation.) That discrepancy made housing
unaffordable for many Americans.
In Stockton, Calif., there is actually a new business of "
foreclosure home tours."
