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Homes for sale with "price reduced" signs are beginning to be a common sight in Maryland. When you talk to sellers, the frustration is mounting and it doesn't seem to be getting any better.
You can blame it on the sub prime meltdown, the equity boom, the war in Iraq-how we have overstretched our military, the unemployment, the dependence on foreign oil, the outsourcing of manufacturing jobs to China and India, the injections of money into major US corporations from foreign nations or whatever, but it doesn't matter how we got here. We are here, and the lessons to learn are many and unfortunately they will be painful.
I believe you and me, need to look this straight in the eye and deal with it. But first, lets talk about recession. Or are we heading into a recession? Definition of recession in a short version: two consecutive quarters of negative GDP growth. What that means to you and me, is that the US is in the "red" and that, is not good. In other words, we are not making any money. According to the experts, some say "yes" while other predict the signs:
- Growth in construction dropped to a 14-month low while home prices fell to a six-year low. And we haven't reached bottom yet.
- Experts predict zero gross domestic product growth for the first quarter ending in March. Our strong export numbers can't overcome weakening domestic end product demand.
- With all the rising housing inventories - it is evident customers aren't buying--an early danger signal of recession, according to experts. This is weakening the market nationwide. Some economic real estate experts say to sell your home in this market, the seller has to find the five lowest priced homes in your comparative market and list yours 10% below that number and you are sure to sell!!
Unemployment is holding up so far, but we're only 100,000 away from a shaky grounds. Employment growth has eased to a nine-month low and unemployment is steadily increasing-expect big layoffs in banking and housing.
- Looking at the nation, experts say recession will develop in Florida and other states first. On top of all this we have the media pounding away with negative financial economic turmoil. This is all difficult to stomach. Plus, the psychology of it is making sentiment bad because housing prices have fallen, and without equity the consumers cannot borrow money to make consumer goods purchases.
- Unfortunately, the massive injections of credit and lower interest rates have not solved the subprime debacle and the freezing up of credit markets. The financial services index has dipped to a 14-year low. It's not clear easy money can save us from a recession. They say, keep an eye on January sales to see if consumer goods are leaving the stores.
Here in QAC, we were down almost 43% for the total dollar volume for the month of Dec. 2007 compared to Dec. 2006.
We are down 38% in total units sold for the month of Dec. 2007 compared to Dec. 2006. FYI, some 31 homes sold for the month of December in QAC compared to 50 homes in December 2006.
You can see other stats by clicking on the chart twice to enlarge. To see homes that sold for Dec. 2007, click here for details.
Read more information at my personal blog: www.qachousingmarket.com
