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  • Homebuilders: Proceed With Caution [View article]
    Great point. I've said for years that until homes become more affordable (i.e., prices fall to match median incomes), sales will languish. In Northern Nevada, the affordability index dropped from 55% to 12%, yet home sales soared, in part because of the number of exotic mortgage products that allowed less-qualified buyers to purchase housing. Since those programs are gone, traffic and sales have dried up.

    Sellers are finally getting a clue to what 'real value' is in the marketplace. But it's taken a long time to bring them into reality. The fact that sales rose in February over January isn't as significant as the fact that current sales are down 25% from last year.

    Until prices drop to the point where the average American can afford to purchase, don't expect the housing market to 'recover.'
    Mar 28 11:45 am |Rating: 0 0
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