First 29 September 2009 Article Summary - Home sales fall after 4 months of increases This article deals with the dip in home resales, which fell by 2.7 percent from the previous month. However, many economists believe that this drop is temporary. Yet, economists like Maki believe that there might not be an increase in the prices of houses. Prices have nevertheless stabilized in the summer, but the prediction is that there will be a downfall during fall and winter season, and anticipate that prices will go very low early next year.
“It doesnt change the underlying trend of improvement, " said Dean Maki, chief U. S. economist at Barclays Capital” (Denverpost. com para 2). Sale of houses with comparison to the previous year, has increased by 3.4 percent and when compared to the previous year the inventory of unsold homes has decreased by 8.5 month supply at the present rate of sales, the level touched the lowest in two years. Phoenix said in Floyd Scott who is the broker owner of Century 21 Arizona Foothills that the foreclosures coming on the market were very few in numbers. He also said that the future will be interesting in the first and second week of October.
One in three houses was bought by the first time buyers in the month of August. This year most of momentum was provided in the market by investors who were snapping up on foreclosures. Dave Denslow an economics professor at the University of Florida said that the prices have dropped quite low in some places and the investors cannot hold back from investing. Though the housing industry has been seeing a downward trend yet some economists believe that it is improving.
According to a report by Laurie Goodman an analyst with Amherst Securities Group, many buyers intend to foreclose which will make up a huge shadow inventory for the homes that are not up in the market yet. In August sales across the nation dropped annually to 5.1 million from 5.24 million, this came as surprise to analysts who had expected a rise of 5.35 million. A 14 percent increase in sales is noticed, however about 30 percent less when compared to the peak in previous four years.
Lawrence Yun, the chief economist of the Realtors predicts that there needs to be a rise of about 5.5 to 6 million a year for the housing market condition to improve. The median sales price went down by 12.5 percent nationally when compared to the same month the previous year, and down by 2 percent when compared to the previous month. Many real estate agents believe that the new rules that were made to restrict conflicts of interest in the process of appraisal and slowing down the sales as appraisal are also slowing down.
Homes have become more affordable due to the low mortgage rates. Freddie Mac stated that the average interest rate on a 30-year loan was around 5.04 percent. About 30 percent of the market last month was accounted for by financially upset sellers and foreclosures. The chief economist of U. S economist with MFR Inc. said that with the rise in foreclosures and unemployment high-priced properties will face more problems. However, the number of unemployed people seeking benefits went down for the third week in a row.
This was proven by the report from the Labor Department that downsizing in organizations is continuing to benefit the recovery of the economic crisis. Strongest sales of homes were noticed in the West, which went up by about 3 percent compared to the levels a year ago. Reference List Zibel, Alan. Home Sales Fall after 4 Months of Increase. 24 September 2009. Denverpost. com. Retrieved 29 September 2009. < http: //www. denverpost. com/economy/ci_13409981 >