The economy and consumers seem to be livelier these days. But the real estate market is not doing well that much.
The government modified upward its budget of third-quarter GDP increase, weekly jobless claims came down to their lowest level in two years and personal incomes put up a solid increase in October. Consumer-confidence data due Tuesday are anticipated to go up, while Friday’s November employment report could demonstrate the increase of additional 150,000 or so jobs opportunities.
Real estate is another story. October new-home sales dropped 8.1% to a seasonally adjusted yearly rate of only 283,000, just off record lows, as existing-home sales slid 2.2% in October to a 4.43 million yearly pace. On Tuesday, S&P/Case-Shiller home-price index data through September is likely to present a 0.5% fall monthly, though pending property sales figures Thursday are likewise predicted to stay weak.
Housing has cast off the toughest of the hangover that preceded April’s expiration of the federal government’s home-buyer tax credit. Real estate listings, for instance, decreased from 12 months of supply for single-family homes and condos this summer, to approximately 10.5 months in October, reported by the National Association of Realtors.
But the industry is only bouncing along a bottom, and demand is tepid, even with mortgage rates below 4.5%. Even leaving out the summer surge, the number of months of real estate listings for sale is still at its highest level since November 2008. Additionally, the numbers don’t include 2.1 million units of “shadow” listings that are still not on the market, based on Corelogic, mostly foreclosures in process.
The risk is that nowadays renewed real estate slowdown heads to a further leg down for prices of Carmel CA homes. It is anticipated that prices could decline another 10% to 15% by the end of 2012. That would distinctly pose risks to the economy and banks. While bigger banks would likely brave out additional price falls of as much as 5%, a double-digit decline could force many to again build loan-loss reserves, denting profit.
Further price falls of Carmel CA homes will in time get sales running once more. As of this moment though, the probable decline will multiply even more doubt, making home buyers of Carmel CA homes on the sidelines and the real estate industry on its back.
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