The sale of new homes is on the decline for the third straight month as of July 2011. But it is not only the sale of new homes that is falling, sales of existing homes are also down.
Although the housing market is only about 1/5 of the economy, it has a big impact because each new home produces three jobs and about $90,000 in tax dollars.
But foreclosures and short sales are lowering home values, which is causing many buyers to reconsider purchases on newly constructed homes, in favor of buying an existing home.
Many are finding it more difficult to purchase a home because of the high unemployment rate coupled with tighter lending guidelines and the need for a larger down payment.
With confidence in the economy falling as a reflection of what is happening on Wall Street, it is not likely that new home sales will rise for some time to come and experts predict that home sales may not recover for a number of years.
There is no simple solution. In this game, somebody is going to lose and the losers will no doubt be those who have the least effect on political capital.
However, you can bet that a decision will be made soon as we are in a Presidential election cycle. And every four years, a very big spot light exposes many things that would otherwise go unnoticed.
The current problems are far too big and really don’t need a spotlight, but it is going to be interesting to see who wins the messaging war.
In any case, the losers will be revealed with the next 12 months or less. Stay tuned.
Appraisal Source is a New York based residential real estate appraisal firm. Their Long Island real estate appraisal firm services Nassau and Suffolk County. In New York City, their firm provides independent residential real estate appraisals for Queens, Brooklyn and Manhattan.
Here’s the original article…New-home sales fall in July