Foreclosure Weeds Strangling The Promise Of Spring In Connecticut

The figures for May show that foreclosure weeds are strangling the promise of spring. Spring is the nesting and house building time. But the May figures show that this time is a barren spring with bleak hope for the future. The real estate market has dropped while more foreclosure numbers are rolling in. It is the biggest tumble since 1992, when the country was just emerging from a gloomy recession.

The declining trend in Connecticut gained speed in May rushing downhill by 11%. It is the worst fall in five consecutive months gnawing into the house prices. The number of REO houses sold also fell by 24% in May. This is the third year of slide. New England based Warren Group released the numbers.

California and Florida continues to be badly hit by foreclosures. The mortgage industry has tightened its credit strings. This is making it difficult for potential buyers to get money for buying houses. Meanwhile more foreclosed houses sitting on the shop shelves are making house prices tumble down even further. In such a scenario people are reluctant to invest in houses fearing that the bottom has not been reached as yet.

Stagnant housing industry is having negative ripple effects on the general economy. Consumer spending is at an all time low with house owners afraid of the roof over their heads to be blown off. The median sales price was down by 10.8% from what it was the previous year. In Connecticut State, Hartford County did better than the state as a whole – the housing price fell by 4% to $234,900 from $244,950. The number of houses sold fell by 23%. The rich counties of Litchfield and Fairfield were the worst hit during May.

Economists apprehend that this declining drift will continue because the housing trend in the state and the nation has not as yet reached the bottom and will not do so until the latter half of 2009. Donald L. Klepper-Smith in New Haven echoes the same thoughts. In May the decline percentage was more than that of the first five months. “This shows an acceleration to the downside,” he added saying no signs are as yet visible of approaching anywhere near the bottom. Others say that the prices have not reached the level as yet from the abnormal peaks it had climbed during the housing boom.

Troubles in Wall Street are making buyers shy away from buying houses.

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