It is not a really big secret that the United State’s housing market is continuing to slide downhill in one of the worst recessions in recent history. According to huduser.org, 2008 data shows up to a 36 percent decline in housing production indicators when compared to the same indicators in 2005-2006, when the market peaked. Most American’s are painfully aware of the current housing situation the country finds itself in.
During the past one year, home sales, particularly new home sales, have declined dramatically. Builders sold 482,000 new single-family homes in 2008, down 38 percent from the 776,000 homes sold in 2007. And builders attitudes about the housing market have never been lower. In many markets “we are no longer competing with other builders. We are competing with foreclosures,” said Steve Ruffner, president of the Southern California division of KB Home. As foreclosures and short sales flood the market, driving prices lower, its become even harder than ever to sell new homes, especially since the foreclosed homes are often virtually new and significantly cheaper. In some markets, builders have even reached that point where the cost of building is more than the selling price, and have thus even stopped building completely.
But all is not doom and gloom. There are some bright spots to this down market. The housing market is great for first-time home buyers because of a combination of the government’s $8000 refundable tax credit, historically low interest rates, and exceptionally low housing prices. Some industry analysts are predicting that we are approaching the bottom of the housing recession, if not already on our way back up. The National Association of Home Builders baseline forecast shows a bottoming-out of sales in both new and existing homes in the first quarter of 2009, aided by the economic stimulus bill signed into law this past February by President Barack Obama and seasonally adjusted net sales showing a modest recovery since last November 2008.
Yes, there are still many signs that the housing market is continuing to decline and will remain in a slump for some time still, but there are signs of improvement. Despite all the negative news in the housing market for many people, mainly first time home buyers, today’s housing market presents a once in a lifetime buying opportunity. While most are fearful the smart buyers today will find and scoop up opportunities which may never present themselves again.
Chris is an editor for Inside Real Estate, a blog network of Realtors sharing their expertise on real estate.
[tags]real estate, foreclosure, foreclosures, housing, market, buying[/tags]
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