Staff Writer, May 27, 2009
On Wednesday, the National Association of Realtors announced that the inventory of unsold homes, including townhouses and condominiums, rose to nearly 4 million in April. It also reported that at the current rate at which new homes are selling, it would take just over 10 months to clear out the unsold properties.
The reason for this surge in supply has been the decrease in demand, because of difficult economic times, but also because of a new wave of foreclosures. Individuals and families are being forced out of their homes before a buyer can be located. This leaves banks with millions of dollars in properties, but with no monthly mortgage payments. Selling these properties off now, though essentially necessary, will further weaken the banks, because they are being forced to list them at much lower prices than what they are actually worth.
The New York Times recently published an article about this crisis, where it cited several housing experts who said that an additional 313,000 homes entered foreclosure in the first two months of 2009 alone.
Homebuilders are also suffering, because few homebuyers want to purchase custom-made homes when there are existing properties that are selling for so cheap.
