Breaking News: Existing Home Sales Fall by Largest Amount Ever!
Author: Joshua Dorkin • URL: http://www.biggerpockets.com/October 24th, 2007 •
Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years. The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.
Analysts blamed the bigger-than-expected slump on the turmoil that hit credit markets and mortgage markets in August as worries increased over rising mortgage foreclosures. Those worries resulted in a drying up of the availability of so-called jumbo mortgages, loans over $417,000, which are particularly important in high-cost areas such as California. AP
Inventories of unsold homes rose to 4.4 million units for the month of September, which, if sold at their current pace, would take 10 1/2 months to sell, which is another record. As inventories of homes climb and people begin to get more and more nervous about the housing market, prices will likely begin to come down further.
We’re on a momentum train right now, and it is heading in the wrong direction! While this provides plenty of opportunity for those people who are savvy investors, the average Joe is really starting to feel the pressure from the marketplace. Additionally, as I’ve said many times before, this will continue to pressure the rest of the economy, and is likely to help put us right in the middle of an ugly recession.
We’ll be here to let you know about any further developments in the housing market and how these things can affect you.
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Tags: , Housing, housing, inventory, iraq, mortgage, recession
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
Where I live, forclosures have skyrocketed. Builders have started offering big discount on new homes as well.
As long as lending restrictions remain loose, these problems will persist, if you ask me. This has been a long time coming, a long time of “exotic” loans. Following them up with more exotic loans won’t help.
I’m not sure how bad it really is, we’ve actually been selling just as much as in years passed. The only downtime we’ve had was in January, besides that we’ve been blowing and going.
While things on a national level may be rocky, there are several places where things are doing quite well. [My own personal market is fairly flat - which beats a decline any day of the week.] Real estate is local, and there can be exceptions to a market snapshot even within the same city where various areas/neighborhoods buck the trend of a softening market.
There will always be ups and downs in the economy. But as far as my experience goes, people buy homes in both times. The sales just happen for many reasons. Maybe people have surplus income, the prices are low etc.