After months of vibrant home sales nationwide, the National Association of Realtors came out with some sobering news this week. The sales of homes continued to slow in November, marking the third straight month of this trend.
And, while here at www.yourdelrayboca.com we’re not predicting, nor are we hoping for this trend to continue it may be time to consider why this is happening.
Some of the obvious reasons are the continuing increase in interest rates. There is also a tight and very limited supply of homes on the market, and it is still difficult for individuals with marginal credit scores to get a mortgage.
We’ve also heard on the street that banks continue to have “shadow inventory,” which refers to homes that are in various stages of the foreclosure process. Once they hit the market, expect the prices of homes to decrease due to increased inventory.
There have also been reports that foreclosures are decreasing. Some have said this decrease is simply because the courts are dismissing many cases due to “lack of prosecution.” They won’t appear “active” until they are re-filed. Keep in mind that banks may be delaying foreclosure proceedings because they don’t want the burden of taxes, insurance, and assessments.
These are just some of the factors that could jeopardize a true real estate recovery. But, then again, if banks release these homes to the market, the good news is that home buyers may get a break in terms of lower prices.
What are your thoughts on this? Is the decrease in volume of sales just a blip or does it represent a trend leading to concern?
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