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Lower Home Prices Cut Both Ways

Gazette.Net released the following news article by Kevin James Shay on Sept. 23, 2011

Frederick Commercial Real EstateThese past two months, Maryland’s housing market has shown more sales, but at lower prices overall.

“While a sales gain is positive, declining home values can be problematic for the economy, said Daraius Irani, an economist at Towson University. The problem is seen in lower consumer confidence and an unwillingness of many homeowners to spend money on new appliances, cars and other big-ticket items, which would stimulate more sales for businesses and lead to more hiring, he said.”

“People aren’t going to spend money when they feel less wealthy,” Irani said of homeowners with dwindling equity. “When home prices are not going up, they don’t feel like going out and making a big purchase.” MORE

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