The spring home-buying season has not started out so well. Single
family home sales dropped 14.5% from February to march, this came as a surprise
as economist predicted an increase after February. Some economists blame this
winter’s crazy weather but others noted the current high prices and high
mortgage rates. The economy is still
recovering, so it will be interesting to see how this plays out in the future.
7 comments:
It will interesting to see how consumer confidence is effected in the short term as the economy is starting to turn around. Recovering from the initial housing crash from poorly selected loans given to high risk borrows with low interest rates that steadily rose.
No matter how our economy progressives, the media still portrays it as "recovering". It seems like the media wants the economy to return to a state that occurred before the recession. But what we have learned about capitalist market systems is that they are always changing and never return to the exact same states. I believe the media wishes the housing market to return to a state that once occurred, but in reality, these markets are always changing and progressing in different ways based on other markets in the system.
I agree with both Brad and Sam, our economy is still progressing. While it may be impossible to return to the exact pre-recession rates, the housing industry has grown in recent years and is continuing to evolve. Mortgage rates and housing costs still remain high, but not significantly higher than industry averages. I think the market will get better within the coming months, and hopefully the home sale season will be successful as the economy continues to shift.
It will be interesting to see if the housing market improves in April and May. If it doesn't the increasing cost of housing as noted in the article should become more of a concern.
If they blame the weather for the drop in sales, statistics have to show that sales declined for the region affected by the weather. It would make no sense if the West sees a drop in sales because this part of the country did not suffer from harsh weather. I think the price signal has prevented people from buying new houses. Home prices will have to go up eventually, but I don’t think this is a good time.
Like Nam said above, I also think weather didn't really affect on the demand for houses. I think that the economy is still recovering and people are hesitant to spend money on high-price houses confidently.
I saw a report on the news this week about people in Columbus selling their houses for above asking price as a result of multiple offers. Yet when I searched further I found national reports of housing downturns such as this article. It is interesting to find such opposing stories. Here is a link to the video. http://abcnews.go.com/Nightline/video/selling-high-end-homes-calls-luxurious-open-houses-23481017
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