In the last quarter of 2007, home prices in the
United States fell roughly 1.3%. That’s a new record fall and not a great sign for those of us involved in the housing industry.
A recent survey by the Office of Federal Housing Enterprise Oversight shown that there are some local markets that are faring well, despite average housing drops. This stability can be hidden by the national survey figures and ignored when discussions about the dropping real estate market are made.
So who hurts the most in a housing drop? Coastal regions seem to fare worst of all.
In a report done on 291 cities, there were widespread declines around the area. However, some of the worst drops were found in
California. Here, homes dropped in price by 6.7% compared to their value the year before.
Florida was also hit hard with 4.7%. Is the bubble bursting for these real estate markets and reducing the real estate value to a more appropriate level, or are coastal regions just more susceptible during housing drops? Can it be a combination of these factors?
Are all the foreclosures causing the housing market to drop?
Despite these dramatic numbers, the rest of the country is holding on better than here. Homes throughout the rest of the country lost less than 2%, while some areas stayed the same. Remarkably, there were even some areas that improved despite national losses. The middle of the country saw more stability since they were never affected by the same rushing price increases seen in Florida, California, Arizona and
There were eight states that even saw house prices rise over the year, including:
- Utah – 9.3%
- Wyoming – 8.3%
- North Dakota – 7.8%
- Montana – 6.9%
- Texas – 6.2%
- New Mexico – 5.4%
- Washington – 5.4%
- Oklahoma – 5.1%
Of course, like any other market, there are a number of other economic developments that are still being watched to see how they will impact these housing numbers. Some of these factors include the number of unsold homes that are currently available in many markets. It seems the inventory for unsold houses is at a historic peak – and continuing to grow. Interest rates and the overall health of the
U.S. economy will directly impact these unsold homes and the comprehensive inventory rates for these homes.
What are some of the things to look out for when analyzing the housing market?
Inventory – The number of existing unsold homes rose to 10.3 months until they are sold. In a balanced market, it should take five to six months to sell these homes, indicating that we are currently seeing a swollen number of unsold homes.
Foreclosures – Default notices, auction sales and bank repossessions are continuing to grow.
Confidence with Home Builders – Each year, a survey is done with construction professionals to gain their views on the existing market conditions. A number over 50 will show positive optimism for the year ahead. October and November of 2007 saw a historic low of 18.
Delinquencies – 5.59% of mortgages had late payments as of third quarter 2007. It’s the highest delinquency rate since the report has been tracked in 22 years and an overall increase of .92%.
If you live in an area where the home prices continue to drop and you need to sell your house, contact your local home buyer to receive an offer right away. A local home buyer is a real estate investor who is local to your area and can help. If you are thinking how will I ever sell my house in this real estate market…Your local home buyer may be your only answer.