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Title: Home Sales Drop 27 Percent in July and Things Are Only Going To Get Worse for The U.S. Housing Industry
Source:
Economic Collapse Blog
URL Source: http://theeconomiccollapseblog.com/ ... e-for-the-u-s-housing-industry
Published: Aug 26, 2010
Author: N/A
Post Date: 2010-08-26 17:50:30 by Eric Stratton
Keywords: None
Views: 117
Comments: 6
Home Sales Drop 27 Percent In July And Things Are Only Going To Get Worse For The U.S. Housing Industry On Tuesday the National Association of Realtors announced that existing home sales in the United States dropped a whopping 27.2% in the month of July. The consensus among analysts was that we would see a drop of around 13 percent, so when the 27 percent figure was announced it sent a shock through world financial markets. To say that the real estate industry is alarmed by these numbers would be a tremendous understatement. What we are seeing unfold is essentially "Armageddon" for those involved in the housing and real estate industries. The real estate market is grinding to a standstill and a shockingly low number of people are actually in the market to buy a home right now. In the months ahead home sales may pick up a little bit, but only if housing prices start to fall. Why? Because right now there are tons of houses on the market and there are very few qualified buyers available to purchase them and potential buyers are starting to realize this. Buyers are beginning to understand that they have all the leverage now and they are waiting for prices to fall. Anyone who has taken Economics 101 in college knows that when supply is high and demand is low prices will fall, and that is exactly the situation we have in the U.S. housing market right now. At the moment, most home sellers in the United States are very hesitant to lower the prices on their homes too much. Many have no intention of selling their homes below what they originally paid for them, and many others truly believe that the housing market will eventually rebound. But the truth is that housing prices are simply not going to rebound to 2006 levels. If anything, they are going to continue to fall. The following are the three basic points that every American needs to understand about the U.S. housing market right now.... 1) There Is A Gigantic Mountain Of Unsold Homes On The Market There are a staggering number of unsold homes on the market right now. As you can see from the chart from the Calculated Risk blog below, there is now over a year's worth of unsold homes flooding the marketplace.... ... 2) There Are Not Nearly Enough Qualified Buyers Seeking To Buy Homes The banks and lending institutions that survived the subprime mortgage crisis of 2007 and 2008 learned some very valuable lessons. The days when even the family dog could get approved for a home loan are long gone. Now the pendulum has swung to the other end of the spectrum. Fearful of making more bad loans, banks and lending institutions have really, really tightened up lending standards. So a lot fewer people are getting approved for home loans these days. ... 3) The Housing Industry Will Never Fully Recover Without A Jobs Recovery First In order to get qualified for home loans, Americans have to have good jobs first. But in this economy that is a huge problem. ... 
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