Bad news doesn’t become more palatable if you wait for it, right? Inventory in July (houses available for purchase) was upboth as a general rule as to what is available, and over the past few Julys.
AND sales are down – 16% over July of 2007.
So, by the law of supply and demand, prices should decrease, right? Remember econ class? If there is a lot of a supply of something, and not a lot of demand, then prices are lower. When demand is high and supply is low, then prices increase. So, let’s take a look –
so far, they are on par with 2007 numbers ($193.1k (now) vs. $193.2k (then).
So, what gives? I’m not entirely sure, but I think part of it is a slowing in the lower portion of the market. The first-time homeowner usually is qualified for a home on the lower end of the price spectrum. When the credit crunch hit, and people were no longer qualified just because they had a pulse and could remember their social security number, then the buyers for the lower-priced homes also lessened. Ergo, you have a greater inventory (the same people with the lower priced houses still have to move like they always have), but the houses being purchased cost more, so the average price stays high. I will need to do some additional checking, but that’s an idea that’s been kicking around in my head.
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