The economy doesn’t always perform well, and when it struggles, it takes a lot of other things with it. Because there are so many areas of life that make up the economy, it’s almost impossible for people to escape completely unscathed. The housing market is one of the largest parts of the economy, and it hasn’t gotten through the recent economic downturn without some serious issues.
How Are Current Home Prices?
The prices of homes continue to fall, down over five percent from November of 2009 to November of 2010, and the number of people who can afford homes seems to be dropping, as well. There are also people who are waiting to buy homes because they think the prices will go even lower. Since they aren’t buying, they aren’t helping the housing market and overall economy recover.
What About the Sellers?
Sellers are also having serious issues with the housing market, because a lot of them are completely stuck. They can’t get what they owe on their homes because the value of them has dropped so sharply, and they can’t sell them for less because the bank won’t always allow it. Some of them are able to get their banks to agree to short sales, but others are facing foreclosure and have just had to walk away from their homes because they can no longer make the payments.
That really hurts their credit, so they aren’t able to buy another house, even at a much lower price. That type of problem is also contributing to the housing market difficulties and the overall problems in the economy. Unfortunately, there is little that can be done. The tax breaks and stimulus money that were designed to jump-start the economy haven’t been as successful as hoped, so both buyers and sellers have been forced to adopt a ‘wait and see’ stance.