More Bad News For Housing

Although many continue to hope that the economy is beginning to turn around, the news on the residential housing front suggests otherwise. Sales are at a 9 year low and foreclosures continue to drive prices downward and encourage the timid to wait out the market to see how low it will go. Savvy investors are picking up incredible deals as the banks holding bank owned property prove to be as incompetent in post foreclosure matters as they were in making loans to the unqualified in the bubble days of the market. Until housing recovers, there will be no real economic recovery. Sadly, as is the case with the long term unemployed, neither the White House or Congress seems to care. Here are highlights from Financial Feed:
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February sales and prices of formerly owned U.S. homes plunged 9.6% monthly with 4.88 million units at an annual rate, the lowest in 9 years, said the National Association of Realtors. The decline was the largest since July and an indication that recovery for the housing market is still unlikely. IHS Global Insight senior economist Chris Christopher said it is still a very depressed housing market.
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Additionally, tight credit conditions and home appraisals that did not meet agreed selling prices affected sales said NAR. Excess homes and too many foreclosures hamper recovery in the housing industry which helped bring the U.S. economy towards the worst slump since the 1930’s.
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The below-market value foreclosure and short sales represent 39% of February dealings from last month’s 37%. Cash purchases on the other hand made up a record 33% of February sales. NAR said new home prices are 45% more expensive that existing home prices.