When buying is cheaper than renting, markets begin to turn. At the current rate of sales, there is less than three months of inventory in the Sacramento market. In normal times, that would indicate a seller’s market. Except these are not normal times. The unemployment rate in the county is 11.3 percent, the highest in decades. That will prompt more foreclosures all by itself. Furthermore, banks have lifted various processing moratoriums that lowered foreclosures last fall.
--David Streitfeld, "Where Home Prices Crashed Early, Signs of a Rebound"; The New York Times (5/5/09)
Nice piece in the NYT encapsulating the competing trends roiling the housing market nationally.
On the one hand, housing prices -- especially foreclosures -- are tantalizingly cheap.
On the other hand, the severe recession is hamstringing people's purchasing power, and ability to qualify for mortgages.
No surprise, then, that cash purchases and various types of alternative financing (contracts for deed, Seller-provided second mortgages) are on the upswing.
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