Sales of houses have decreased and are experiencing a 4 year low. As per the National Association of Realtors, the median price has also taken a dive for the tenth month now. Homeowners are experiencing a very bad situation as they would have to further lower the selling price so as to attract the buyers. The log jam of houses is one of the reasons which caused this kind of situation. The second reason which can be accounted is psychology. People are expecting the prices to fall more and so, are taking their time to purchase homes. The median price for an existing home has fallen 2.4% since last year. Also, the mortgaging companies have raised their conditions making it more difficult for a consumer to buy a house. However, the lending standards were only raised after experiencing losses by the respective companies during real estate boom.
The real estate low is also causing shrink in the economy. The new-home sales figures by the commerce department will be out now and field experts are also expecting a decrease.
Source: USAtoday
Image credit: Cahomeinsurance
Comments
There seems to be a lot of predictions going around about the state of the housing market, and the best indicator of where the actual prices should be in historical values is about 5X the median income for the area. If home prices are below that range, then it may possibly be a good time to buy, but if the prices exceeds this then there may some room for prices to drop.