Sales of previously owned residential properties, including bank foreclosure dwellings, are projected to record a decline for January 2011 in the U.S. Full month data has yet to be finalized, but economists are projecting a decline in sales in this category, which will mean that a housing market recovery will take some time to happen.
The number of existing houses sold for the month as well as homes under HUD foreclosure list is expected to record an annual rate of 5.22 million, which will represent a 1.1% drop from December 2010. Last year, full year sales for the category totaled 4.91 million, the lowest figure recorded in the country for the past 13 years.
According to housing industry analysts, demand for dwellings gained momentum in the latter half of 2010 as sales decline to their lowest levels and low-priced repo homes and foreclosed properties flooded the market. However, this demand did not materialize into sales as the unemployment rate of the country jumped to 9%, effectively limiting the ability of buyers to take advantage of the affordable properties that were available in the market.
The lack of buyers also increased the supply of bank foreclosure and distressed dwellings in the U.S. during the second half of last year, realtors stated. However, most of them believe that although sales are still low compared with normal market levels, signs are emerging that the housing industry is starting to slowly improve.
The number of existing residences and auctions homes for sale that were sold in January is between 4.86 million and 5.5 million. December 2010 sales for this category reached a total of 5.28 million. Analysts stated that the market might be showing minimal signs of improvement, but a recovery is not possible this year as the market will be coming from a deep bottom, characterized by declining housing values.
They stated that this decline in home prices has held back consumer spending and has also hammered the home building sector. Analysts further added that the peak of the bank foreclosure problem will happen this year, with foreclosure notices expected to rise by another 20% before 2011 ends.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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