169,401 New Listings - March 2010 - Last update March 15, 2010 6:15 AM ESTThe Picking Up of Sales of Foreclosed Houses Indicate Revival of the Market
There are feeble signs that the economy is going to be taken off its life support as it shows signs of responding. The picking up of sales of foreclosed houses is indicating a revival of the market – however weak.
This change is the direct result of low mortgage rates (lowest in decades) and steep discounted prices. This has led to a surfeit of affordable houses. The first time nest builders can take advantage of tax credits that will be effective till 1st December. The recovery this spring is expected to be modest. In fact there is the danger that even if that does not happen then the recession will worsen.
The economy is waiting for the buyer – the swallow to return bringing in tidings of good weather. The coming back of buyers would give great relief to residents like Jennifer Folkerson who stays on the outskirts of Salt Lake City. She moved to a new home last autumn but failed to sell the old unit. Now burdened with two mortgages she has put up both houses for sale. Many came to give the houses a look over but no one could get a loan to buy it.
But since the fall of mortgage rates and house prices, houses have become more affordable. Since the 70’s house prices have never been so low. It is being predicted that prices are going to fall further. Some analysts like Michelle Meyer of Capital fear that the bottom will be reached only around 2010.
More and more houses lying in the limbo of foreclosures will start hitting the market and cause prices to fall further. With deepening of the recession and mounting unemployment the buyers will continue to sit on the fence taking a wait and watch attitude.
There were however recent signs that the few buyers who are ready to buy residential houses are now ready to take the plunge and open their purses. According to the National Association of Realtors the number of signed sales contracts for houses that had been previously occupied increased by 2.1% to 82.1% in February in comparison to January’s 80.4%.
Generally there is a time gap of one or two months from the signing of the contract to the finalization of the deal. Some analysts are unwilling to take this as an indication of sales pick up. The February sales increase has been the largest since the last six years.
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