Home Sales Point Towards Bottom
Here is a report from Reuters today along with our analysis
"The National Association of Realtors said sales climbed 2.9 percent to an annual rate of 4.68 million"
"Most of the sales are taking place in lower price ranges and activity is beginning to pick-up in the mid-price ranges, but high-end home sales remain sluggish," NAR chief economist Lawrence Yun told reporters.
As unemployment goes up and people lose their jobs, home prices start falling. As the high end homes go to foreclosures, it forces pressure on the mid-price and low-price homes. So as people start buying at bargain prices, demand goes up for the low-price home. Naturally, as these homes start moving off the market, the next level priced homes start getting pushed up in price.
I can see this happening in my own neighborhood in Chicago. The distressed units are driving down prices for everyone else in the neighborhood. However, so long as those who do not need to sell don't put their homes on the market, these distressed properties will eventually be bought and taken off the market and bring stability back to the neighborhood.
So as we see a slow down in unemployment rates and a slow down in the foreclosure rates, stability of prices and ultimate growth are surely to follow.
http://www.reuters.com/article/gc03/idUSN2754905920090527
"The National Association of Realtors said sales climbed 2.9 percent to an annual rate of 4.68 million"
"Most of the sales are taking place in lower price ranges and activity is beginning to pick-up in the mid-price ranges, but high-end home sales remain sluggish," NAR chief economist Lawrence Yun told reporters.
As unemployment goes up and people lose their jobs, home prices start falling. As the high end homes go to foreclosures, it forces pressure on the mid-price and low-price homes. So as people start buying at bargain prices, demand goes up for the low-price home. Naturally, as these homes start moving off the market, the next level priced homes start getting pushed up in price.
I can see this happening in my own neighborhood in Chicago. The distressed units are driving down prices for everyone else in the neighborhood. However, so long as those who do not need to sell don't put their homes on the market, these distressed properties will eventually be bought and taken off the market and bring stability back to the neighborhood.
So as we see a slow down in unemployment rates and a slow down in the foreclosure rates, stability of prices and ultimate growth are surely to follow.
http://www.reuters.com/article/gc03/idUSN2754905920090527
posted by BIRDVIEW at
2:21 PM
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