National housing continues into its cycle. Home purchases have declined and new home builders have responded by slowing construction of new residences. They are attempting to bring down inventories so prices (appraisals) can remain as high as possible and so they can give away fewer incentives.
MSNBC reported on 2/16/07:
"WASHINGTON - Construction of new homes and apartments plunged by 14.3 percent in January, the Commerce Department reported Friday.
"The bigger-than-expected drop left construction at a seasonally adjusted annual rate of 1.408 million units, the lowest level in nearly 10 years.
"On Thursday, a real estate trade group reported that the slump in housing deepened in the final three months of last year. The National Association of Realtors said that sales of existing homes fell in 40 states and home prices dropped in 49 percent of the metropolitan areas surveyed, the widest price decline in the history of the Realtors’ survey.
"Many economists are worried that the housing bust, which followed a five-year boom, could be a prolonged one as sellers struggle to reduce record levels of unsold homes."
So, what's this say about local markets? Well, each market has its own factors but generally local markets are feeling the effects of the slow down. Real estate agents are required to pull out all the stops to get houses sold. Good Realtors love it because it requires a real professional to get the job done. Sellers must be patient and buyers are getting all sorts of great opportunities.
Is now a great time to buy? Investors are watching indicators like interest rates, the current record breaking stock market, and other factors specific to local markets. Every good investor knows that cyclical troughs are a great time to invest. Buy low, sell high, right? So, which factors are you watching to take action?