For- Sale Inventory
Inventories of home for sale around the country expanded during the house slowdown, reaching a 10.6 month’s supply in 2007, Almost twice the 5.5 month’s supply considered balanced by historical standards. Inventories started easing in 2008, falling to 9.9 months in the third quarter.
Looking to 2009, new housing starts- which peaked at 2.2. Millions units in 2005- will continue to head down, NAR (National Association of Realtors) says. That’s not good for builders, but it’s good for inventories. On the other hand, delinquencies and foreclosures are projected to rise in 2009, putting more distressed housing on the market and keeping downward pressure on prices.
Expect a national average of 8.8 months’ supply in 2009 based on the market trends in late 2008. To help spur sales-in addition to pushing for an interest- rate buy down- NAR is asking Congress to eliminate the repayment requirement in the home buyer tax credit, enacted in 2008, and to make the tax credit open to all buyers, not just those who haven’t been home owners in at least three years. One development in late 2008 that was expected to help boost demand is the decision by the Federal reserve to buy mortgage-backed securities on the secondary market. The move was expected to lower mortgage interest rates which will help return inventory to balanced conditions.
Source: NAR Research
By Robert Freedmen
Source: National Realtors Magazine Jan 09 issue
Posted by Nilesh Jethwa Wilmington, NC Real Estate
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