If people say the housing market is bad, what does that mean?

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  • Anonymous
    1 decade ago
    Favorite Answer

    The present real estate market is bad for both buyers and sellers. True. We are presently in a buyers market which simply means conditions are more favorable to buyers. Specifically, these conditions are a glut of homes offered for sale with very few buyers. Subsequently, buyers have a huge amount of bargaining power when negotiating for a home. 30 year fixed rate mortgages are still at a favorable level, but the (ARM) adjustable rate mortgages are considerably higher due to the FED's increases in the bank overnight rate. The higher ARM rate is a considerable negative for many buyers in that the housing boom from 2001 to 2005 was largely financed by ARM type mortgages. These low interest ARM's combined with a substantial number of investors fueled the dramatic price increases during the boom period. Home prices in many areas of the country have become unaffordable for many home buyers. Prices are slowly declining as sellers are pressured by market conditions, but they still have not fallen to an affordable level for many young workers. So, although there is a tremendous inventory of homes offered for sale, they are not yet priced at a level which will generate sales activity. Subsequently, the market is bad for both buyers and sellers. It appears the market will stay bad until home prices decline to an affordable level.

    Source(s): In the businesss
  • 1 decade ago

    The housing market usually gets bad when the interest rates rises.

    Most people do not want or cannot afford to borrow money to buy a house with high interest rates.

    As a result... the people who want to sell their house have to lower their price to find a buyer and lose money in the process.

    That is when the housing market is bad.

    However... it is not bad for everyone. Those who buy a house at that time can get a real bargain... and make some good money when the price rise again. That is as long as you don't have to sell your own house to buy a new one... otherwise what you gain on buying... you lose on selling.

    It works great if you are buying your first house or are looking at buying a second one for investment.

    The rising of interests also slow down the building industry as the demand for new housing slows down for the same reason as above. That is when the economie start to suffer.

    high interest rates = bad housing market.

  • Anonymous
    1 decade ago

    There is no such thing as that. You can have anything you set your mind to. This term only means that it is a bad time to buy a house. I know you don't believe that, right? Tell that to all those people selling their homes. Continue to look for your home until you find that perfect place you can call, home. You see I was one of those people they told, you will never own a home. Well I have had three homes and this house I'm in now Iv'e been in now for six years. Never give up and go on only what you think. Take care and enjoy the holidays.

  • 1 decade ago

    Abgroove is right -- this refers only to a glut of available houses, and is only "bad" for suppliers, not home buyers (who are not trying to sell a house in the process). Oddly enough it means that houses are easier for you to buy if you want one, which is a very good thing if you are a consumer looking to buy a house.

    Specifically it refers to when the supply of housing overwhelms the demand for housing: The number of "housing starts" (builders beginning construction on new houses) is declining or growing more slowly than usual; the price of existing homes is declining or only growing slowly; and the number of homes for sale is increasing because people are having trouble finding buyers for homes they are selling.

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  • 1 decade ago

    The housing market is never bad as a whole. It is either bad for sellers or bad for buyers. When interest rates are high and houses are overpriced, it's bad for buyers. When interest rates are low and prices are falling, it's bad for sellers.

  • NC
    Lv 7
    1 decade ago

    Depends on who says it. Bad market for home buyers is the one with high prices. Bad market for home sellers in the one with low prices. Bad market for realtors is the one with low turnover.

  • 1 decade ago

    this can mean that the housing market would not be the correct choice of investment at the period of time . But also the real estate industry is something to be dealt with caution .

  • 1 decade ago

    It means that the time now for selling and buying houses is not the best.

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