The Oregon Biz Report - Business News from Oregon

Read about accutane journal moderate acne here

Housing Market Splits: Big homes sell, others lag

October 10, 2011

Housing Market Splits: Big homes sell, smaller ones lag 
By Oregon Tax News

About six million homes need to be sold every year in this country to maintain its housing market. But at current sales rates, fewer than 4.75 million will sell this year.

But that’s only among normal home buyers. Among the 1.5% of Americans that are buying luxury homes worth more than a million dollars, home prices are up 0.7% according to Zillow. The housing market has split into two sectors. Among higher value homes, business is booming. For the rest of the country, prices are still falling and not expected to normalize until 2013. Prices are expected to fall at least five percent more between now and the end of the year.  

Nearly twenty-five percent of American homeowners owe more on their house than it’s worth. Plus, huge numbers of foreclosures have made it very difficult to get a loan—despite record low interest rates. Nearly half of current homeowners would be unable to get a loan today, according to economist Paul Dales of Capital Economics. Due to these foreclosures, new homes cost 28% more on average than used ones. Under normal circumstances, a new house is only about 14% more expensive.

The luxury market is fueled by international business. Foreigners purchased $82 billion worth of American real estate last year, whereas in 2009 only $66 billion in real estate was sold to foreign clients. Many of these rich clients are able to bid in cash. The twists of the stock market are a topic of conversation for them—not a topic of worry.

First-time homebuyers are getting rarer. Only 32% of July home sales were made to first-time home buyers. Usually, nearly 50% of sales are to first-timers. First-time buyers are important because by purchasing smaller, cheaper homes, they allow sellers to purchase more expensive, larger ones.

Usually, the luxury market and the non-luxury market move together. Some economists find the split between the two troubling.

  
Print This Post Print This Post    Email This Post Email This Post

Discuss this article

no comments yet

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Articles

Press Releases



Top Business News

 

Top Women's News

 

Top Natural Resource News

 

Top Faith News

 

Copyright © 2016, OregonReport. All Rights Reserved. | Terms of Use - Copyright - Legal Policy | Contact Oregon Report

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Business Report through daily email updates:

Delivered by FeedBurner

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

RSS Twitter Facebook

No Thanks (close this box)