Foreclosure For-Sale Sprouting Like Spring Blooms

May 28th, 2008

Like spring blooms, foreclosure related for-sale signs are sprouting everywhere right across the country. But the units are not selling. There are no buyers in an economy that is slumping. Mark Zandi of Moody’s predicts that the spring is going to be difficult. Perhaps it is the beginning of the end of troubles but it will drag on painfully. It is a far cry from the zooming years stretching from 2001 to 2005. For five consecutive years the price of real estate had gone on increasing leaving realtors in a tizzy. Thousands bought houses in search of quick profits. But since 2006 things have started getting sour – the worst since the World War II. Construction is going to go down to the lowest rung of the ladder since the 40’s. Prices will fall the greatest since the Great Depression.

The hardest hit are California, Florida, Nevada and Arizona together with some regions of the north east In the Midwest the problem is lay offs in the automobile world. Virtually the entire county is affected by the housing slump with variations in concentration from one region to another. Economic gains have been shaved off and the GDP has for the past two quarters somehow scraped through to an increase of 0.6% avoiding the threat of a full recession.

According to the National Association of Realtors 46 states witnessed a decline during the first quarter in comparison to the same period during the last year. In two thirds of 149 metropolitan regions, prices declined to record levels since 1979. Maryland was the worst hit with sales falling below 38.6% in the first quarter as compared to the first quarter of 200. Across the country the decline was by 22.2%. Nationally the drop was by 7.7% during the first quarter with the biggest offender being Sacramento in California with 29.2%. The debacle is continuing. Prices continue to fall. Sale of existing sales fell by 1% during April – this was the 8^th drop in the past nine months. The average house price fell 8% in comparison to what it was a year ago during the same period. It is biggest nosedive since records have been kept.

The question before all is how much worse can the weather get? Some are hopeful looking at the sales pick up in parts of San Diego, California and Fort Myers. This is largely because of the huge discounts being offered.