Thursday, September 18, 2008
I received this post today from The Mortgage Guys, in Lansing Michigan. They keep me posted on a daily basis of the current financial market conditions, interest rates and to either lock in the rates or float. This is good service for home buyers and sellers in the greater Lansing area to have access to search homes on my site and get solid financial information from my contacts in our concierge department. Thanks Don for another great update.
In August, home builders broke ground on the fewest number of homes since January 1991.
It was the 16th straight month in which Housing Starts declined.
But, although the press labels these statistics indicative of a recession, home sellers nationwide quietly applaud them.
With fewer new homes coming on the market, home sellers are finding that there's less competition for buyers, helping them to command higher prices for their homes.
It's Supply and Demand in its most basic form.
But that's not all that home buyers have to worry about. The most recent Existing Home Sales report showed an increase in sales nationwide, plus a reduction in the number of single-family homes for sale.
Again, Supply and Demand. Good for sellers, bad for buyers.
However, we should keep in mind that real estate is local. What we see in national and regional trends are not as important as what's happening in your town, your neighborhood, and your street. But, if we learn one thing from the chart above, it's this: builders are rational.
If homes won't sell, builders will stop building them. And, sooner or later, the market -- and home prices -- will catch up.
(Image courtesy: The Wall Street Journal)
"Expect the Best" Mike