Thursday March 01, 2007

Housing sales drop in 40 states

news.yahoo.com :

The slump in housing deepened in the final three months of last year with sales falling in 40 states and median home prices dropping in nearly half the metropolitan areas surveyed. Formerly red-hot areas were among the hardest hit as the five-year housing boom cooled considerably in 2006. While some economists said they believed the worst may be over for housing, others predicted more price declines to come until near-record levels of unsold homes are reduced.

Mark Zandi, chief economist for Moody's Economy.com, predicted that home prices in many parts of the country would continue to be under pressure for the rest of this year as the market works through still large inventories of unsold homes. He said this process will be made more difficult with banks raising lending standards because of concerns about rising mortgage default rates.

"The price declines we are seeing are extraordinarily broad-based and just symbolize how significant a price correction we are in," Zandi said. "We are seeing the declines concentrated in the industrial Midwest, where the job market is a mess due to the layoffs in the auto industry, and in markets such as Florida and California" where a heavy influx of speculators had bid up prices, Zandi said.

See also :

1. The housing bubble has burst
2. "Affordable Housing"
3. US 'spending binge' to end as housing market slows
4. All signs point to an economic slowdown
5. Housing Slowdown May Claim 800000 Jobs

(2007-03-01 12:28:46 SGT) [Biz] Permalink

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