27 major cities are reporting the number of houses listed for sale in the fourth quarter of 2009 were notably lower than each of the prior 3 quarter figures. The reduction in the inventories is a positive sign for the 2009 lack luster housing market.
According to Zelman & Associates a research firm, the 4th quarter of every year for the past 25 years sees a minimal decrease of 1.8% in homes that are available on the market. The numbers for this year far outpace that declining trend at 28% increased inventories.
Measuring the health of the market by the total amount of homes available for sale at any given time is not by any means a complete evaluation. These numbers do not reflect the amount of properties that were foreclosed upon, and are being prepared for sale by banks and other lenders. The 1st quarter of 2010 may see a noticeable increase in inventory due to these unprocessed foreclosures. As of October 2009 there were 639,000 homes on the market that were foreclosed upon. That number accounts for approximately 10% of the total number of homes that were marketed for sale during that year.
The summer of 2009 saw a decrease in the number of bank & investor held homes for sale. October’s figures for 2009 reached a level that had not been seen since January 2009. The lower numbers over the summer are being credited to the swarm of relief programs that local and federal agencies are pushing.
Currently there are 7.5 million loans that are delinquent, or are already in the foreclosure process. These properties are eventually going to make their way to the market. These “toxic assets” have to be dealt with in the coming year before that market will stabilize.
The 1st quarter is guaranteed to see a dramatic increase in bank & investor owned properties reaching the market. It is the general consensus of many economists that this rush to market to get their properties ready for sale in the 1st quarter is in direct response to the pending expiration of the $8,000 federal tax credit in April.
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