Considering growing the family? Sell the old house first!
By: David Gibbons, Zillow Director, Community Relations | August 27, 2007
According to the National Association of Realtors (NAR) it will currently take longer to sell your average home than it does to have a child. The NAR said in a press release issued this morning, that by the end of July:
- inventory of (existing) homes available for sale had reached 9.6 months of supply and
- median (existing) house prices had fallen 0.6% to $228,900 since last July.
A few sacred cows were slaughtered with this news. A 2004 report co-authored by then Chief Economist for NAR, David Lereah, concluded that “there is little possibility of a widespread national decline since there is no national housing market.” That assumption is based on the principle that “all real estate is local” but industry pundits now realize that trends in lending, responsible for much of the demand in housing, are indeed national. This news shouldn’t surprise regular readers; Zillow has measured a nation-wide reduction in home values since the final quarter of 2006.
The second sacred cow did surprise me. It’s a common assumption that the ailing housing market is just a few good rate cuts away from recovery. NAR’s press release suggests otherwise and states that the cost of a mortgage is more favorable today than it was a year ago; “According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.70 percent in July, up from 6.66 percent in June; the rate was 6.76 percent in July 2006.”
It’s natural to wonder where the market is headed and where it will be by year’s end. What do you think?
- Stumble it!
- Categories: Real Estate Analytics, Real Estate Industry, Zillow
Comments
3 Comments so far
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Gerald SanFilippo on September 5, 2007 11:46 pm
I’m a home builder foe some 40 years and have never see better homes or less interest in them. I’m no economist but perhaps if we want to become part of the new world order and “world” economy and have most of our construction workers underpaid non Americans and buy 99% of our stuff from non Americans then we should expect to live in homes like these non Americans left in their non America countries. In countries where there is cheap labor, no unions and jillions of poor people with no hope of ever owning a home you always have a few super rich folks who love the situation ( read almost everywhere but American). America is blessed with natural resources but her real strength is her people. If her people want to give up the best life the world has ever known, created by their own fathers who were non Americans and new first hand about bad economics, in order to get cheap lawn care and construction work and fill their houses and basements and garages with low cost wonderful toys for their kids then they deserve to live like every other overpopulated, low moral lifestyle, no respect for their parents country in the world. In any country where making a buck anyway you can, making more money for a small class than they can never spend in a hundred life times, and forgetting that there probably is a God and not a slick corporation who created love and this beautiful unique-for-mega-lightyears-around world; home ownership for the masses is not successful. Japan was ruled by a god but lost a war with us and had no neighborhoods like L.A. or St. Paul. China has been around for ever and doesn’t know anything about a tri-level with an above ground pool for the common factory worker. Our own South had cheap labor before the Civil War and what good did that do for the cotton picker? After all these years those workers are still behind most Americans in home ownership. Seems as if the skilled hardworking men and women of any society who build homes or cars or even toys but can not make enough money to buy those things then that group, except for those few who find a way no matter how get to the top, are in a heap of trouble. Looking back or forward seems the same.
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Bill Trudeau on January 8, 2008 12:59 am
In response to Mr. Sanfilippo above, the reason homes are not selling for what he hopes is because the market in the town he’s building in is absolutely flooded with overpriced ugly homes. When there are over 100 homes listed at over a million dollars each that have languished on the market for two years or more, common sense would dictate that you would stop building them.