Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Is real estate market in U.S. losing some steam?

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October 06, 2005

Is real estate market in U.S. losing some steam?

Some people certainly think so. Consider the following points:

- in Manhattan, the average sale price fell almost 13 percent in the third quarter; the amount of time it took to sell a home was also up 30.4 percent over the previous year

- in Fairfax County, Virginia, near Washington, the number of homes on the market rose nearly 50 percent from August 2004, to August of this year

- in the Boston suburb of Brookline, Massachusetts, where typical three-bedroom houses cost about $1 million, the inventory of homes for sale has increased in just the past few weeks

- in the San Francisco area, number of homes for sale has increased 16 percent in the past year

This has happened in the last two years, and each time real estate market would bounce back with the vengeance. This time, however, the slowdown could be for real. The reasons are the highest cost of fuel in decades and higher mortgage rates. Add to this homeowners who expect to make $100,000 in 6 months and ask exuberant prices, and more cautious buyers who refuse to pay them, and that explains why certain people think that housing market is about to cool off considerably.

Also read real estate bubble analysis from CEPR.

 
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