A U.S. housing market with rising demand but stagnant prices may be the new normal, according to the New York Times. The numbers bore that out yesterday when the National Association of Realtors reported prices decreased between June and July even as sales of existing homes rose 2.3 percent over that same period.
Even though concerns that a backlog of distressed properties would hit the market have mostly subsided, sales of new homes have trended higher and there is generally percieved to be a shortage of residential inventory, the Times suggested that prices would barely increase over the next decade.
Real estate agents told the paper that a weak job market, stagnant wages and tight lending standards are keeping prices glued to the floor. Furthermore, even though people want new homes, many are reluctant to overpay as memories of the crash remain fresh. And with the global and national economies still hanging in the balance, the best that can be expected are short periods of price spikes amid a largely flat trend. [NYT] — Adam Fusfeld