The Associated Press has just reported that new home sales are down for the third month in a row, with February sales at its’ lowest in over 50 years.  Evidentially, economists say that a healthy pace for new home sales is 700,000 a year, nationally, while we are currently on pace to building just 250,000….seems like we might have more than our share of new homes being built right here in Southern Maryland...at least in Waldorf.

Perhaps coincidentally, we have noted that it was about 3 months ago that the national builders in our area raised their prices, across the board by as much as $50k-$60 or more.  Consumers are obviously telling new home builders that they no longer see a value in buying new as a result of the price hike.

Another recent change in the market, and perhaps as a result of prices going up in new construction, is the rental inventory has fallen dramatically over the last 3-4 months, and we are seeing an increase in rental rates as a result.

This all sounds like a lot of bad news, but it could mean good news for the resale market. If home buyers are finding less choices, when it comes to selection, they might find resale homes, foreclosures and short sales more attractive options. If this happens, and I believe it already is happening, we might get out of this housing crisis that is currently upon us, sooner than later.  Prices are still declining and there is still an unknown amount of “shadow inventory” of bank foreclosures hitting the market, so there are still some unknown factors that will affect the outcome.