The sale of new homes took a nose dive in November from October, down to the lowest level in 12 years! It is just another example of how different the housing market is from a few years ago, when the housing boom was crazy. Economists did expect the drop in sales but they were predicting a drop closer to 1.8 percent, not the 9 percent that we did see.
Of course we are in the West, the only area of the country where sales still rose. It was only by 4 percent but in the South sales fell 6.4 percent, 19.3 percent in the Northeast and 27.6 percent in the Midwest. This only makes sense since the West was the last to see the housing boom of 2001-2005 so we did not have as far to fall. We are also in the fortunate position of having people still continuing to move here.
Naturally, with the housing slump, foreclosures are at record highs and still going up. Another thing that is not going our way but not nearly as bad as the rest of the country. With the home prices currently dropping, some recent buyers balances are actually higher than their new current value. People also were agreeing to variable rates that lead to impossible payments when rates didn't stay low. So those who planned on refinancing when payments started to rise cannot find relief since their house is no longer worth enough and loan requirements have been tightened.
While completely necessary to buckle down on loan applications, this should have been done long ago to PREVENT these problems. Now the number of homes on the market is ridiculous and certainly not helped by the extremely strict credit restrictions. These symptoms can certainly be seen here in Oregon but comparatively, we are living the high life.
All you Pacific Northwest real estate agents still may want to go into this year cautiously, but you can also stay positive knowing it could be worse.
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