Home Sales Fall in Summertime

The most suitable time of the year to sell your home has become the worst time. Home sales dropped nearly 30% from July and have reached an all-time bottom in more than ten years, reported the Wall Street Journal.

 

What many had hoped would be the best time to sell their home has turned into a depressing statistic. Paul Dales of Capital Economics predicts housing prices will continue to drop by 5% to 30% during the recession.

 

The housing market is predicted to head for a double dip in home prices with several factors driving the downward slide. One factor is many more homes are being listed on the real estate market by banks. Foreclosures on are the rise and glutting the market with a 12.5 month supply of homes few are willing and able to purchase. High unemployment and wage stagnation hold steady as economic forces whose presence may continue well into the future.

 

Home prices stabilized last year due to the home-buyer tax credit of $ 8,000. Now the government sponsored stimulus expired April 30, 2010 and a sales drop was expected according to the National Association of Realtors. The drop-off wasn’t expected to be severe yet sets a new low for the organization since it began recording in 1999.

 

Speculative demand drove housing prices higher and higher as investors turned to housing to make quick profit. Fear drove many to purchase homes before the opportunity passed them by. There came a point where the prices were jacked up so high, the supply of new homes entering the market outpaced demand. Then the bubble popped in over-heated markets across America.

 

Now the market fear is that consumers will not purchase homes because they expect another fall in prices. Although most economists were predicting a “soft landing” for the housing market cooling, statistics are showing it is as a bust with more market correction ahead.

 

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