If you are thinking this is a good time to buy a house, think again. Here is a preview of what happens: Shanghai’s housing bubble bursts, causing some panic,
American homeowners wondering what follows a housing bubble can look to China’s largest city.
Once one of the hottest markets in the world, sales of homes have virtually halted in some areas of Shanghai, prompting developers to slash prices and real estate brokerages to shutter thousands of offices.
For the first time, homeowners here are learning what it means to have an upside-down mortgage — when the value of a home falls below the amount of debt on the property. Recent home buyers are suing to get their money back. Banks are fretting about a wave of defaults on loans.
Now, to the situation in America:
Local housing prices have come tumbling down over the last two months, erasing months of drastic increases.
Just two months ago, the median sale price for homes in Clovis’ 93611 zip code was $439,000. But in just 60 days, those homes plummeted $51,000, to $388,000.
That housing bubble has definitely sprung a leak.
This morning, the National Association of Realtors reported that sales of existing homes fell 2.8 percent in January to a seasonally adjusted annual rate of 6.56 million new units. Existing condominium and co-op sales were even worse, falling 10.6 percent last month.
… oday’s bad news comes on the heels of a separate report issued Monday by the Commerce Department that showed that sales of newly constructed homes also fell in January – by 5 percent.
Maybe this is a good time to wait a bit before making an offer on a house. Why not wait a month or two and pay a lot less? Or wait 6 months and pay half as much? There is a LOT of room for prices to fall this time.