Housing Slowdown Nearing End Say Experts
The slowdown in housing sales may be nearing the bottom, experts outside of the housing industry are saying. Builders have drastically cut back on production and pricing has moderated. Add to that interest rates that have stabilized and look like they may come down, the housing market looks to have a stable 2007.
U.S. homebuilders have been slashing prices to reduce unsold inventories in the most severe housing slowdown since 1990, while unseasonably warm weather is prompting a spurt of construction.
“It looks like the weather was a factor in November,” said Bill Cheney, chief economist at John Hancock Financial in Boston. “Overall, though, I think we’re close to the bottom, with mortgage applications turning up and prices soft.”
Housing starts jumped 6.7% in November from October to a seasonally adjusted rate of 1.59 million units, the U.S. Commerce Department said yesterday. Economists had predicted 1.54 million units for the month. via the National Post.
Another factor that may be coming into play are the people who have been sitting on the sidelines may be getting itchy. No one wants to buy at the top of the market, or buy too early and miss out on a deal. But when the market stabilizes and starts the upward turn, those on the sidelines will be racing to get in.
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Comment by Rhea on 20 December 2006:
This is wishful thinking on the part of realtors. I believe the market is going to take quite a while (years) to sort itself out. The inventory is enormous in many markets and folks in my area (Boston) are still not buying, and rightly so.
Comment by Tom on 20 December 2006:
Rhea
I agree with you in Boston. I did a post a while back that Mass has big issues as pricing, financing, and cash out home equity moves for lifestyle have put added pressures to the market that other areas are not having to deal with.
Boston has for the past 20 years had much deeper cycles than most of the country.
Thanks for the comments.