According to MarketWatch, "Sales of new homes in the United States fell to a 13-year low in February, dropping 1.3% to a seasonally adjusted annual rate of 590,000, the Commerce Department estimated Wednesday. Sales have fallen four months in a row and are off about 30% in the past year. The number of homes on the market dropped by 2.1% to 471,000, the lowest since July 2005, an indication that builders are trying to work off their bloated inventories of unsold homes. The inventory represented a 9.8-month supply at the February sales rate, unchanged from January and the highest since 1981. The median sales price fell 2.7% in the past year to $244,100."
This sounds bad, and for the most part it isn't great news. However, until we can get the "bloated inventories of unsold homes" off of the market, we won't see real improvement. Builders are still sitting on homes they started before the credit crunch when it was easy to get a loan. Now, they are faced with unsold properties, paranoid borrowers (or bargain seekers) and construction loans now due. Many are still holding out for sales prices that they easily could have received last summer.
Once we get to a healthy level of homes for sale, both new and existing construction, we will see prices stabilize and a "normal" market.
In Oregon, we're lucky, existing homes are still appreciating in most markets and it's still a great time to buy. There are still some great loan programs available for most borrowers.
Larry Morris is a Certified Mortgage Planning Specialist with American Nationwide Mortgage Company in Newberg, Oregon. He specializes in USDA Guaranteed Rural Home Loans, FHA Purchase and Refinance, FHA 203k Rehab loans, Sect 184 Native American loans, Hobby Farm loans and conforming purchase and refinances in the states of Oregon and Washington.
He can be reached at 503-421-0096, or larry@PDX-Mortgage.com.
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