Listing prices continue to be affected by the rising number of U.S. foreclosures. They are the one single problem that has a detrimental effect on the real estate industry. In addition to reducing listing prices on existing homes, the sales of new homes are weakened. Economists are predicting that the large supply of foreclosed homes sitting on the market will keep new home sales from growing. However, they do agree that sales of existing homes will continue to increase in numbers.
It is, as with any other industry, dependent on geographical area, and the continuing improvement of the job market. Banks, those institutions that created the current status of mortgages, are now rushing to foreclose on additional homes in 50 percent of the states. State officials resolved a dispute with five major mortgage lending institutions. The issue that needed to be addressed was institutionalized foreclosure abuses.
One leading economist expects the excess number of foreclosures will result in another five percent decrease in prices. Standard & Poor’s/Case-Shiller index of home prices reported another decline from January to February. This report involved 16 of the total of 20 cities that it reports on. This was a sixth decline in the row.
The sales of new homes fell in March by 7.1 percent. This is a seasonally adjusted annual rate.
On the positive side, there was previously to March’s decline, a 7.3 percent gain of new home sales in February. Viewed from another vantage point, new home sales rose 7.5 percent in March, 2012 compared to March 2011.
Economists suggest that price stabilization is close at hand. The real estate industry experienced the smallest annual drop over the last 12 months. It was 3.5 percent. Also, there was an increase in purchase of existing homes in January and February. Builders who construct new homes have plans that are more favorable than at any time in the last three years.
Needless to say, this will create more jobs in construction. That in turn will result in more citizens having the ability to purchase homes. Generally speaking, the economy is moving up.