Speaking generally, the US real estate market is in a lot of trouble at the moment. This is summarized in the news article below:
Credit squeeze heightens US housing market woes
Wednesday, September 26, 2007
The ailing US property market got more bad news today as an industry report showed existing home sales fell 4.3 per cent in August and the glut of unsold properties rose further.
The National Association of Realtors (NAR) report indicated that credit market turmoil hurt sales, making it harder for buyers to get mortgages in many cases.
The NAR said existing-home sales fell to a seasonally adjusted rate of 5.50 million units in August from 5.75 million in July.
The figure is down 12.8 per cent from a year ago, and was in line with market expectations amid troubles in the housing sector after a long period of sizzling growth.
"The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through," said NAR senior economist Lawrence Yun.
"Lower sales contributed to a buildup of unsold inventory."
One bright spot in the report was the first annual price increase in 13 months, the association said.
The national median existing-home price for all housing types was $US224,500 ($A258,900) in August, up 0.2 per cent from August 2006.
But the glut of unsold homes rose 0.4 per cent at the end of August to 4.58 million, a 10.0-month supply at the current sales pace.
The NAR report noted that home sales were affected by tightened credit standards after fears of failures in the mortgage sector rocked financial markets starting in early August.
Yun said he expects similar results for home sales in September.
"Once we get through these disruptions, we'll get a better sense of where the actual market is in late fall as conditions begin to normalise," he said.
Because many mortgages are bundled into securities, they depend on investor willingness to buy these. So-called jumbo loans, over the current limit of $US417,000 ($A480,885), are not bought by the big US mortgage finance companies and are now harder to obtain.
"The housing market continues to look very weak and now it is weakening further after looking like it had hit a bit of a plateau," said Robert Brusca at FAO Economics.
--AAP.
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