Foreclosure Crisis Has Badly Hit Sale of Houses

In the real estate market this is the worst scenario since World War II. The foreclosure crisis has badly hit sale of houses. There are all the indications of a looming recession.
Sale of houses is down, unemployment figures are worsening and consumer confidence is at an all time low.

In a report released by National Association of Home Builders showed that feelings among the house builders were at an all time low during the first week of October. The chief economist of this group, David Seiders said that the construction industry is facing a two-pronged attack – loans for building new houses are difficult to get and more difficult is it to sell the ones that they build. He apprehends that in the forthcoming months production will be drastically cut. This year so far 936,000 new houses including apartments have been built. The figure is the lowest since 1945. He said, “The builders are telling us that the financial crisis is really hurting because people justifiably have no idea where things are going.” Applications for new building sanctions dropped by 8.2% – the lowest since the last 25 years.

President Bush was optimistic about the $700 billion lifeboat that has been launched and commented that it was “big enough and bold enough to work.” But Bush warned that some time has to be given for it to thaw the frozen credit markets.

But economic pundits opine that the rescue has come too late to skirt recession. Many are saying that the total economic performance as measured by domestic production most likely did shrink from July to September this year. The foreclosure crisis was responsible for dragging it down.

Mike Zandi of Moody’s Economy commented, “I don’t think there is any ambiguity with respect to whether we are in recession. I think it actually started at the end of last year, and because of the financial panic we are going through now, it is likely to last another year.”

Other experts opine that at least three running quarters will have to suffer this contraction. It is the consumers who are responsible for two thirds of all economic activity. They are now cornered with slim purses and suffering as never before since the last seventy years.

Sara Johnson of Global Insight, Massachusetts said that although there has been some relief in energy prices, fears about job losses, lowering of income and vanishing of wealth have overshadowed all other concerns.

Foreclosures in Massachusetts Top Counties

• Worcester County
• Essex County
• Middlesex County
• Plymouth County
• Bristol County
• Search Foreclosures by State

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