Housing Slump May Be Chipping Away at Previously Strong Regional Markets
- Jan 25, 2008
New York–In regions that had almost avoided the housing slump–including Manhattan–hard-to-get credit, a slowing economy and low consumer confidence are reducing home sales and prices, the Wall Street Journal reports.Months ago, places such as the Pacific Northwest and North Carolina seemed immune to the housing decline that plagued the rest of the nation; now those formerly resilient markets are experiencing a reduction in housing demand.Even Manhattan–where prices rose sharply last year–may be on the brink of a slump because the national residential downturn has caused more than $100 billion of mortgage-related security losses on Wall Street and eliminated jobs, according to the Journal. The loss also seems to have eliminated property. The Manhattan condo supply remained unchanged in late 2007, but the inventory of co-ops was down 26 percent from a year earlier. A year ago, Queens and Long Island had a 12-month supply of homes for sale; at the close of 2007, the amount of homes for sale in both areas was enough to last for 18 months.Throughout the U.S., local housing markets are varied. Unsold home inventories remain large in Florida, Phoenix, Las Vegas and Detroit, according to a Wall Street Journal quarterly survey of housing data in 28 major metropolitan areas; however, in Boston and Denver, the number of homes listed for sale declined in 2007.Fourth quarter defaults in California more than doubled, rising from 37,994 to 81,550, according to La Jolla, Calif.-based research firm DataQuick. Steven Thomas, president of Re/Max Real Estate Services in Aliso Viejo, Calif., says about a quarter of the listings in California’s Orange County are foreclosed properties owned by lenders or homes people are trying to sell for less than what they owe the bank for the home’s mortgage.December sales in the San Francisco and in Southern California areas were the slowest in two decades, according to DataQuick; for now.However, some markets have more homes for sale. In the Seattle area, three counties saw inventory shoot up 50 percent in 2007. Inventory even increased at the end of the year, which is typically a slow period, when compared to 2006.