Buyer traffic in September appears to have worsened as the index of Realtor Activity slid further to its lowest point since last December.
Even the investor demand that has carried the market recently appeared to fizzle, judging by the comments from agents, while traditional buyers remain frozen by a lack of confidence and inability to get financing. According to one agent, “Since the fallout over the credit ceiling debate in August the market has dropped significantly with buyers willing to stand on the sidelines. Buyer confidence has been rattled further with many buyers opting to rent instead of buy and wait to see how the economy pans out. Buyers expect further price declines and they are waiting for the new wave of foreclosure properties to be released by the end of this year before they move on any buying opportunity. It looks like the market will be in a funk until we have those foreclosures on the market and until better direction, confidence and a clear economic direction are defined.”
A bright spot continues to be continued interest in prime leisure property from foreign investors and vacationers.
Prices seem to be stable and on-market inventory declined. Buyers are worried about a large shadow-inventory still held by banks that will need to be sold in the coming months and years.
Comments from real estate agents:
- “The bad economic news 24 hours a day is causing many buyers to put purchasing on hold. Until the unemployment rate goes down I do not see the market improving. Too many middle income buyers are starting to worry about their jobs..”
