Housing Slowing...?

A: The housing #'s didnt come in great. Statistics show that All 4 sectors of the US housing market have experienced declines in purchase prices and increases in time on the market.

The October Housing Starts # was released today and showed:

The Commerce Department reported that construction of new homes and apartments fell by 5.6 percent last month to a seasonally adjusted annual rate of 2.01 million units.

So, is housing slowing? YES! However, 2.01M units constructed is still a very good number and is only a decline due to the unsustainable growth experienced in previous quarters.

This is the first time in quite a while that ALL 4 regions of this country have experienced a decline in housing prices at the same time. The Midwest + West Coast were the worst hit with a aproximate 10% decline or so, while the Northeast was hit with a 7% decline or so.

SURPRISED? Im not! If you have been reading my posts on www.urbandigs.com, you shouldnt be surprised either. There are fundamentals that are clearly pointing to a slowing in the housing market. They include:

RISING RATES ---> INCREASED SUPPLY ---> PSYCHOLOGICAL STRAIN LOWERING DEMAND ---> TIMING (Coming off an incredible 3-4 years of growth)

Now, before you go and stop your plans of buying a new or second home, you have to think about WHY YOU ARE PLANNING TO BUY? I still believe that if you are secured in your job, and making good money, and have enough liquid assets to cover the starting costs of home ownership, that real estate is a great decision.

But if you are planning to move soon, or your job is not secure, or you just got a paycut, or you are about to incur higher living expenses for whatever reason without the rise in income, then THINK TWICE about buying right now! You might find your home worth 15-25% less if you are forced to sell in the next few years.

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