The upside to a housing slump is cheaper homes. But many prospective buyers don't see bargains yet, especially as stricter lending standards qualify only the cream of the credit crop.
While some markets like south Florida, Las Vegas and the central valley of California have seen sharp declines in home prices -- up to 20 percent by some measures -- overall national statistics show a much less dramatic drop so far.
Home prices fell 0.4 percent nationally in the third quarter, according to the Office of Federal Housing Enterprise Oversight. That's the first decline after 50 straight quarters of appreciation averaging 1.62 percent per quarter. The U.S. Standard & Poor's/Case-Shiller home price index, another home price tracker, said prices dropped a record 6.7 percent in October from a year ago.
While the supply of unsold homes is at a record high and forecasts of further price depreciation and swelling inventories bode well for buyers, housing affordability still remains low. The decrease in housing prices has only begun to eat into the nearly 13 years of quarterly price gains.
The National Association of Home Builders said in November that only 42 percent of all homes sold in the third quarter were priced low enough to be affordable for families earning the national median income of $59,000. That's down from 61.5 percent in the third quarter of 2001, when incomes and, more importantly, home prices were lower during this decade's recession.
Colorado Springs, Colo., real estate agent Terry Shattuck said only those who need to move are motivated buyers these days.
No comments:
Post a Comment