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Majority Of U.s. States Experience Home Sales Declines

(Home owners throughout the United States have been reeling from hearing, seeing and reading news about the sudden and drastic decline of home sales and now prices.)

What began as a speculation of will the "boom" end? has now become a realistic nightmare for home owners or investors who expected to sell this year to make a quick profit, or "flip" the property.

Home owners began discussing the market at their children's little league games and are now bantering, comparing their local housing market with their cousins who live across the country.

The article, "Home sales fall in 38 states, data shows" written by Lauren Villagran and posted November 20, 2006 on Yahoo! News, explains how no region of the country is safe from becoming a buyer's market.

"The feeble U.S. housing market showed more frailty in October when home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday."

The survey, conducted by the National association of Realtors (NAR) also showed that home prices dropped as well. The median home price throughout the U.S. fell 1.2 percent from its year-over-year mark and now sits at $224,900. Overall, 45 metropolitan areas have watched their home prices decline.

Building permits in October 2006 had also reportedly been issued at the lowest rate in nine years. And housing starts (new home construction) also greatly declined in an effort to curb the high amount of vacant inventories as demand still falters.

But the market may not have even reached its low point yet, well that's low for sellers but high for buyers.

"I think the permits numbers point to yet another flight of stairs down on housing before we hit the basement," Stuart Hoffman, chief economist at PNC Financial Services Group said. "On the other side, stocks are rising, consumer confidence is good and jobs are rising. Those factors are keeping this decline in housing contained."

The current U.S. economy is preventing a hard landing or "crash" in the housing market, as high consumer confidence allows the housing market to remain hopeful to return to normal.

"'The economy is growing more slowly, but we have yet to have weakness spread beyond housing and motor vehicles to such a degree that we need to fear the proximity of a hard landing,' said John Lonski, chief economist of Moody's Investor Service, referring to when the economy turns from growth to a recession."

As long as the economy remains relatively stable, U.S. home owners need not fear the current market unless they are forced to sell immediately.

Otherwise, real estate has always appreciated in the past and should continue to do so. So, even though the price and sales decreases are alarming, do not panic, for all should be restored.

Besides, interest rates are at their lowest in over a year. Once prices fall a bit more, buyers will become active again, prompting perhaps another mini boom.

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