Buyers Market
New construction has been slowing dramatically as the national builders try to work off their excess inventory and cut back on the number of starts. Price declines in new construction are the inevitable result of incentives being offered to clear high inventories. Competing against a high inventory of preowned homes available for sale on the market, many buyers who wanted to purchase new construction cannot close because their home has not sold and they are forced to cancel their contracts adding to the inventory of available new construction. Those sellers who are priced to sell at realistic, market driven prices are still finding buyers for their property, it is those who have an inflated view of the real value of their home and who are stubbornly refusing to reduce their price who are finding no buyers and of course, the longer the house sits unsold on the market, the lower the offer will be if and when it finally comes. The real lesson for sellers is that pricing right from the start will result in a quicker sale at a higher price. Buyers have a wonderful advantage with lots of property to choose from, both new and preowned.
From MarketWatch, an interesting article on the market, housing bubble and more.
HEMPSTEAD, N.Y. (MarketWatch) -- The fate of the housing market is no longer in the Federal Reserve's hands, since psychology has now become the driving force behind the decline in home prices.
This means that last week's reported plunge in housing starts and building permits is likely to be followed by more of the same for the foreseeable future.
See full story. As everyone knows by now, the 17 hikes in interest rates engineered by Fed policymakers since the middle of 2004 have punctured the housing bubble -- the same bubble that the Fed, itself, helped create earlier when it pushed rates to a 45-year low.
Read moreSeveral other interesting posts on the subject.