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Inventory crunch meaning
Inventory crunch meaning






Mortgage rates in 25 major cities around the world tracked by UBS have almost doubled on average since last year, making house purchases much less affordable. In the United States, sales of existing homes were down by more than 28% year-over-year in October, the ninth consecutive monthly decline, according to the National Association of Realtors. A closely watched survey showed that new buyer inquiries fell for the sixth successive month in October to the lowest level since 2008, excluding the early months of 2020 when the market was largely shut because of the pandemic. House sales in Britain were 32% below the previous year’s level in September, according to official figures. Sales are sliding elsewhere too, as banks take a more cautious approach to lending and aspiring homebuyers delay purchases in the face of much higher borrowing costs and a deteriorating economic outlook. Home sales have fallen by 43% this year, according to China Index Academy, a research firm. Prices for new homes in China fell at the fastest pace in over seven years in October, according to official figures, reflecting a deepening property market slump that has gripped the country for months and is weighing heavily on its economy. In a “pessimistic” scenario, US prices could plunge as much as 20%, Dallas Fed economist Enrique Martinez-Garcia wrote in a blog post recently. Economists at Goldman Sachs expect a decline of around 5%-10% from the peak reached in June through to March 2024. House prices in the United States - which rose during the pandemic by the most since the 1970s - are falling too. “We’re in the early period in quite a clear downturn now and the only real question is how steep and how long it’s going to be.”

inventory crunch meaning

“Data lags probably mean that most markets are now seeing falling prices,” said Slater. House prices are already falling in more than half of the 18 advanced economies that Oxford Economics tracks, including the United Kingdom, Germany, Sweden, Australia and Canada, where prices dropped by around 7% from February to August. It isn’t impossible, but it’s more likely that housing downturns come with nastier consequences,” Slater told CNN Business. “In an ideal world, you’ll get a bit of froth blown off the top and everything is fine. A sharp increase in joblessness could lead to forced sales and foreclosures, “where steep discounts are common,” according to Slater.īut even if the correction in prices is mild, a housing market slowdown could have severe consequences because housing transactions in turn boost activity in other sectors of the economy. One key factor determining how low prices go? Unemployment. “Overall, this is the most worrying housing market outlook since 2007-2008, with markets poised between the prospect of modest declines and much steeper ones of 15%-20%,” said Adam Slater, a lead economist at Oxford Economics, a consultancy. Isabel Infantes/AFP/Getty ImagesĪ decade of rising house prices is over. Sales have plunged nearly 35% and median house prices are down 7.5% over the past year.Ī member of the public looks at residential properties displayed for sale in the window of an estate agents' in London on September 30, 2022. The time it takes to sell a property in New Zealand has increased by around 10 days on average since October 2021, according to the Real Estate Institute of New Zealand. Since then, Barfoot & Thompson’s clearance rate at auction has plummeted, according to Sykes, prolonging sales times and sending prices lower. That was in May 2021, when sales attracted thousands of bidders who drove prices ever higher.

inventory crunch meaning inventory crunch meaning

(Most homes in New Zealand are sold at auction.) In one example, a property sold for 1 million New Zealand dollars ($610,000) above the asking price in an auction that lasted all of eight minutes. “There were chin-dropping moments when agents stand around the room and are gobsmacked at the prices being achieved,” he told CNN Business. Houses were “flying out the door,” said Grant Sykes, a manager at real estate agency Barfoot & Thompson. Last year, Auckland’s largest real estate company couldn’t sell properties quickly enough to meet demand in New Zealand’s biggest city.








Inventory crunch meaning