Foreclosed Homes – Selling, Are you Buying?
After going through a continued period of looking at agonizing statistics, economists said that they see a ray of hope in a housing report that was released earlier this month.
According to an announcement made, pending home sales in June 2008 increased 5.3% in comparison with May 2008. Sales still are 12% lower as compared with last year though.
While economists were expecting a drop of 1%, this has come as a pleasant surprise to many.
Goldman Sachs’ economists said that despite this indication being unpredictable and being affected by foreclosures to an unknown level, it did suggest that the real estate market in the resale segment could now see stability.
High Frequency Economics’ chief U.S economist, Ian Shepherdson, said that considering that this is the second positive surprise in the last 3 months, it would be hard to ignore. Going on he said that despite no availability of a break down of numbers, they assumed that foreclosed homes selling are creating the upward movement.
Speaking of data, he said that while sales are on the rise everywhere, they have gone up by 9.3% in the south and 4.6% in the west, areas with the highest foreclosures. Doubting the sales of non-foreclosed houses increasing, he said that as far as the total inventory of homes on the market went down, the development is a welcome one. Though this might not be the fix that the housing market needs, this could very well be the start of the finish (of the crash), he added.
According to the chief economist at Commerce Bancorp Inc, Joel L Naroff, sales of foreclosure homes have played an important part in the improvement reported. He also said that homes are now affordable to people who don’t have good incomes but have the money and the credit. Considering all aspects together, he felt that the bottom has been reached when it comes to home sales.
Prudential Fox & Roach’s senior vice-president of marketing, Steve Storti, said that the current market favors people who are buying their first homes.