The first month of the third quarter of 2010, the housing market registered the lowest sale of new properties. The sales declined by 12.4%, making it 276,000 in July while it was 315,000 in June. The reason for this decline is the end of homebuyer’s tax credits in April. The result was that, during the third quarter, the sales actually decreased by 32.4% compared to last year same time.
There was a forecast that the sale of new properties will increase in July 2010 and would reach 334,000, but that did not happen. The housing market is still in a hangover stage, which is the result of recession that ended in 2009. The problem continues to persist for housing market, because of acute unemployment and underemployment as well as a massive increase in the foreclosure proceedings. Just to add up to the problem, the prices of the preoccupied properties have eroded to the lowest levels, allowing the prospective homebuyers to get a property for heavily discounted prices.
March and April registered the highest sale for new properties due to $8,000 tax credits, which were available. But, with the end of the incentive, sales in May dwindled down and modest pace was seen in June. The economy will get an overhaul and recover out of the problems only when the housing industry rebounds back. This, however, seems to be a far cry, because of the well stocked inventories of the banks with foreclosure properties.
Since the banks are trying to get rid of their stocks, the new homebuyers are gaining from heavily discounted prices for the preoccupied properties, leading to a growth in repossession instead of purchase of new properties. No doubt, the prospective homebuyers are in a win-win position. So, for those willing to invest in foreclosure homes, the best time is today.
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