Housing Still In Trouble
The residential real estate market is still in trouble across the country. On Tuesday, the National Association of Realtors released a report saying that 80% of all homes in major cities had home prices fall in the 3rd quarter of the year. They said that more than 30% of all home deals came from “discounted distressed sales.”
What they mean is that the homes that were being negotiated were all those houses that have been foreclosed, or are being negotiated for short sales. The reality is that there are just too many of those homes for sale, and those prices have dropped drastically in many places. You can literally get a house in Florida for 90% less than its original value in some places. In some neighborhoods of Detroit, you can actually purchase a house for less than $10; just amazing.
Of course, the pricing of homes is kind of a game in and of itself. I refer to a site like Zillow, which earlier this year had the worth of my home climbing way beyond anywhere I’d have ever thought possible in this economy. In the last four months, however, supposedly its worth has fallen almost $65,000, without anything in the area happening except one couple, which had been trying to sell their house as a FSBO for more than a year, finally hooked up with a realtor, and have drastically reduced how much they want for the house so they can get out of here and move to Florida.
It’s no wonder that the government extended the home credit another year. What they now need to do is encourage the banks to start lending to home owners, since they’re not going to get them to fully overhaul their credit card issues any time soon. And hopefully, they’ll be more amenable to the process; I doubt it, though.