The Associated Press reports today that the national housing market continues to pull back…
Sales of existing homes fell for a fourth straight month in June and even a small increase in home prices was not enough to lift the gloom surrounding the housing industry.
The National Association of Realtors reported that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units, the slowest sales pace in 4 1/2 years…
…private economists…noted that existing home sales were falling at an annual rate of 28 percent in the second quarter, the steepest plunge so far in the downturn.
“Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year,” said Ian Shepherdson, chief economist at High Frequency Economics, a private forecasting firm…
…Rising defaults in [subprime mortgages] are dumping more homes onto an already glutted market.
The sales declines covered all parts of the country. Sales were down 7.3 percent in the Northeast and 6.8 percent in the West. Sales fell 2.8 percent in the Midwest and 1.7 percent in the South.
The slumping housing market raises concerns that Kohl Construction’s aggressive bid to build 31 condo units behind North Street is poorly timed. Empty, abandoned, and foreclosed homes can cause major problems for neighborhoods. If speculators buy some of the units and rent them out, financial stress may induce them to turn a blind eye to disruptive or criminal tenants, or tempt them to rent the units to larger groups of people than they would normally be expected to house.