Tuesday, January 18, 2011
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The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.
That seems obvious, but the "buyers' strike" has caused house prices to drop, along with an epidemic of foreclosures. What's worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than 1 million homes were foreclosed upon in 2010.
Many economists argue that the housing market may take four or five years to stabilize. Even if that's proven to be true, the all-time highs of 2006 may never be reached again.
24/7 Wall St. looked at a number of the standard measures to find the housing markets facing the biggest problems attracting buyers. After a detailed examination, six metrics were chosen: (1) vacancy rates for 2010; (2) foreclosure rates for 2010; (3) November 2010 unemployment rates; (4) change in building permits from 2006 to 2010; (5) change in population from 2005 to 2010; and (6) price reduction by major cities for 2010. Taken together, they create a strong statistical base to describe markets which buyers have largely abandoned.
The real estate crisis has gone on for four years. In the states 24/7 Wall St. has chosen here, the crisis will go on much longer:
- Michigan
- Nevada
- Arizona
- California
- Illinois
- Georgia
- Oregon
Vacancy Rate: 21.03% (2nd Worst)
2010 Foreclosures: 5.51% (3rd Worst)
Decrease in Building Permits 2006-2010: -81.37% (3rd Worst)
Unemployment in Florida is 12%, the fourth worst in the country. (The REAL unemployment and under-employment is much higher) Approximately 1.1 million residents are out of work. Statistics show that 21.03% of the state's housing units are vacant. Furthermore, 5.51% of homes have been foreclosed upon. Florida was among five states that had the largest real estate booms from 2000 to 2006. Residential prices in some areas like…Palm Beach rose by much more than double during that period. New home and condominium construction soared. Many of those residences have never been occupied and are still part of the inventory of homes for sale.
If you are thinking about selling, now or in the near term, even if you owe much more than your home is worth, please call me directly at 561-602-1258. We just know how to sell homes, even in this market...I just put a home in The Greens under contract in under a week and had a closing yesterday for another Winston Trails seller for whom we applied a secret strategy that generated overwhelming property interest and a top price in about 2 weeks.
