This past January home sales plummeted to their lowest level in the last 18 months. Shortages in property sales can be attributed to higher mortgage rates and prices. There was a 5.1% drop in the sales of previously owned homes, and $188,900 was the median sale price, a 10.7% increase from last year! (WSJ, Home Sales Fall to 18-Month Low Amid Low Inventories). Foreclosing properties have become a goldmine for rich investors looking to press their advantages. Severe weather nationwide has also been a cause of higher prices, and less willing buyers. The low supply of available houses is also doing a lot to hurt the market. In January only 1.9 million homes were seen on the market, among the lowest numbers in the last 12 years. There has also been a large drop in the amount of house construction going on, fewer than 570,000 new single-family homes were constructed last year. This number is far below the 1.1 million average of the years 1990 through 2003 (WSJ, Home Sales Fall to 18-Month Low Amid Low Inventories). The still recovering real estate market needs a major turn around. Keith Knutsson, real estate consultant writes on the worrying housing situation that lies before us.
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