It hasn’t been the best week for the economy. Dismal news from the financial sector has dampened spirits in many sectors. However, the real estate market nationwide continues to be one of the hardest hit areas of the economy by the recent upheaval in the credit market.

According to a report from the Commerce Department, August sales of new single-family homes fell by 11.5 percent. The adjusted annual rate for 2008 sales hit 460,000 in August, well below the 508,000 units forecast by economists. It was the lowest annually adjusted rate seen in more than 18 years nationwide.

Prices were also down sharply during the month. The average sales price of a new construction single-family home fell by more than 6 percent to $221,900 in August, down from $236,500 a year ago.

The drop in sales led to a new increase in the market supply of new construction homes nationwide. The current market supply based on August sales now stands at more than 10 months. This could lead to more discounts by developers looking to capture the interest of buyers. Buyers on the North Shore Chicago Real Estate market could also start to see some great deals in communities around the region.

Technorati Tags: Chicago Real Estate, North Shore Chicago Homes, New Construction Homes For Sale

Construction of single-family homes and condominiums fell to its lowest level in 17 years in August. The U.S. Commerce Department reported today that construction of new single-family and multi-family units fell by 6.2 percent from the same period last year.

The August data gives an annual adjusted rate of just 895,000 new units, the fewest number of units to be built in a year in 17 years. Analysts had expected a less than 2 percent drop in construction of residential units nationwide, and the news is sure to quiet those looking for a rebound in the real estate market in the short term. When looking at just condominium and apartment units, the drop was even more pronounced. Construction of multi-family units fell by just over 15 percent in August.

The Midwest region was also hard hit by the drop in new residential construction. The region saw a drop in activity of 13.6 percent in August. Only the Northeast saw a larger decline during the month, with new construction activity down 14.5 percent. There doesn’t seem to be any relief coming for the battered real estate industry. The number of new building permits issued during August also fell nearly 9 percent. Construction continues, however, on many new projects on the North Shore Chicago Real Estate market.

Technorati Tags: North Shore Chicago Real Estate, Chicago Homes, New North Shore Homes

The federal government announced an ambitious plan to bail out two ailing mortgage giants. Fannie Mae and Freddie Mac have been hard hit by the recent downturn in the market and skyrocketing foreclosures across the nation. The bailout intends to inject the market with much-needed confidence.

However, what does all of this mean for us? The first area where homeowners and buyers will feel the effect could be in declining mortgage rates. Successive cuts in the interest rate by the Fed has done little to bring down mortgage rates, but the bailout of Freddie Mac and Fannie Mae could change that. This could mean that more buyers will be able to afford homes around the nation.

Distressed homeowners could stand to benefit as well. Lower interest rates could lead to a more favorable refinancing, lowering monthly payments and helping to keep foreclosures down.

Home prices could also be in for a shot in the arm. As fewer homes, particularly foreclosed homes, come on the market, there will be fewer options for buyers, leaving them at a disadvantage when it comes time to negotiate the final price. The news could be a positive development for the North Shore Chicago Real Estate market.

Technorati Tags: Chicago Homes, Fannie Mae, Freddie Mac, North Shore Chicago Real Estate