Source: Livingston Parish News Online
Editorial: No cause for panic in housing market
Everyone in the U.S. is watching home sales this year as a barometer of the overall health of the economy. Much of the year's stock market gains were erased in a two-week span this month when the news of rising mortgage defaults in an environment of slowing home sales set off a near panic that circled the globe. The Federal Reserve finally stepped in and lowered interest rates to head off the possibility of a credit crunch that might lead to across-the-board economic woes.
Yet the Commerce Department reported Friday that new-home sales unexpectedly rose 2.8 percent in July, after falling 4 percent in June. Despite that increase, sales are down a significant 10.2 percent from a year ago. This is, however, an overall national statistic and does not necessarily reflect the uniqueness of each region. Broken down regionally, the July improvement is seen to originate mostly in the West, where sales went up by 22.4 percent. In the South, sales were up 0.6 percent. Meanwhile, the Northeast saw a 24.3 percent downturn, while sales were down 0.9 percent in the Midwest.
Because of lagging sales, home prices have been flat or dropping, but not by dramatic amounts. While buyers are more cautious and resistant to high prices and credit is tighter, sellers are also willing to hold on and leave their houses on the market longer if that's what it takes. The median price of a new home in the U.S. was $239,500 in July, up from $238,100 in July a year ago, while the average home price dropped to $300,800 in July, down from $311,300 for the same month last year. The fact that the average is down while the median is up indicates that despite the market swoon, more buyers are purchasing more expensive properties – possibly because they see opportunity in a softer market.
One thing that continues to insulate our area from some of the problems experienced elsewhere is the relatively inexpensive real estate in this region. That may sound like an odd statement during this boom economy, but the fact is the average home sale price in Denham Springs in July was $175,000 and that's well below average and median in most places in the country.
Accurate Valuations Group Appraiser, William D. Cobb, has operated as a home appraiser for 15 years now primarily in the Greater Baton Rouge, Louisiana market. For more information on Accurate Valuations Home Appraisal Group, visit Baton Rouge Homes Realtors Appraisers