Remember the big college football programs in the 1980’s. They would have 11 players on the field and 100 on the sidelines.
That is where the buyers are right now, sitting on the sidelines waiting for the game to be decided. Of course, that is brutal for those trying to sell a home today. Earlier in the year, the economy was good and we had lots of corporate moves and transfers adding to some of the real estate volume, but that has also died out, leaving the housing market stuck.
For the month of November only 407,000 homes sold. This included a 17.9 percent increase in Western United States, even as the region saw a 25 percent decline in prices. It does not take a rocket scientist to determine that the region is liquidating their foreclosures.
The hope is that these bleak numbers will be forming the bottom. Once that occurs many who are sitting on the sidelines may be in a position to join the market. With low mortgage rates available and low housing prices the beginning of the year may be the time for many first time homebuyers to jump into the market.
Sales of existing homes fell 8.6 percent to a seasonally adjusted 4.49 million units in November compared with October and were down 10.6 percent compared with the same period a year ago, according to data from the National Association of Realtors. The Commerce Department reported sales of new, single-family homes fell 2.9 percent to a seasonally adjusted annual rate of 407,000 in November. It was the slowest sales rate in 18 years and down 35 percent compared with a year earlier.
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Home prices also tumbled. Median new-home sales prices fell to $220,400 in November, down 11.5 percent from $249,100 a year earlier. The slump in the resale market was even more pronounced: Existing-home prices fell 13.2 percent, to $181,300 from $208,800, the largest drop since the Realtors group began collecting data in 1968 and likely the largest decline since the Great Depression.
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It really is the time to buy. Markets like this are prone to over-correct. If Uncle Sam keeps printing money, which he most likely will, we're in for a hell of a downturn. that doesn't mean it's time to wait to buy a house! It means that if you want to buy anytime in the next 10 years or so you ought to get on it. You think rates are going to be this low forever? In a few years, I will not be surprised if we're back in the double digits. And prices will still be going down. But you'll only be able to afford half the house you could buy if you buy now. Get on it!