It wasn’t long ago that housing seemed like the best possible investment. Housing prices just kept going up, up, up.
Now 2011 is on track to become the sixth consecutive year of declines in new home sales and, as a consequence, prices are going down, down, down. Unless the housing market rebounds, which appears unlikely, 2011 will see the fewest homes sold on record (records have been kept since 1963).
The Wall Street Journal notes that “The 323,000 new homes sold in 2010 was less than 60% of the number of new homes sold in 1963, even though the
population today is nearly two-thirds bigger.”
Even with interest rates at historically low rates for the past couple of years, the market has continued to decline.
Even more discouraging, The Journal notes that housing has increasingly been tied to economic cycles.