Yes, the new housing data have been reported ad nauseam. But…inquiring minds are looking at the SFGate.com article with its fresh angle:
Potential buyers are hesitating because they think home prices still have further to fall. Potential sellers — those with the stomach to put their homes on the market at all, anyway — are reluctant to lower their prices.
“It really is a self-fulfilling prophecy,” said Aaron Zapata, a real estate agent in Brea, Calif. “If all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.”
While the standoff plays out, home sales are plummeting.
This has all happened while the government has stood resolute in keeping
This spring, government tax credits helped drive sales, especially among first-time buyers of less expensive homes. But those tax credits have expired now, and many people rushed to lock in sales before they did.
Since then, the number of homes lingering on the market has swelled to nearly 4 million in July. At the current pace of sales, it would take about a year and two weeks to sell all those homes and get them off the market. A healthy level is six months.
So all the king’s men and all the king’s money couldn’t put the housing market back together again.
The last line in the article is very ominous:
“The housing market is undermining the already faltering wider economic recovery,” said Paul Dales, U.S. economist with Capital Economics. “With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse.”
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