There is always a risk analyzing real estate sales on a month-by-month, year-by-year basis precisely because the underlying factors are fluid and nothing is really the same in the comparisons. However, it is always important to understand the state of the market and until a better way presents itself this will have to suffice.

With sales of new homes in the Seattle area the lowest in five years it might be tempting to say that yes, the housing market is slowing down. Pundits have even begun contemplating the dreaded ‘R’ word in relation to the economy.

I am going out on a limb here but my guess is that the economy is as far away from a recession as it has ever been and that while new home sales figures may be slow buyers are just taking longer to pick new homes for two distinct but related reasons:

First, foreclosures are beginning to bring into the market a steady stream of homes which can be picked up at a bargain price. Homes which are brought to the market as a result of foreclosure are more complicated to sell, the buyer needs to line up credit and a survey needs to be done if it hasn’t already and because the homes are almost always in less than perfect condition buyers tend to take longer to make up their mind as they weigh up all the options available to them.

Lenders also are more careful these days. They take longer to line up credit, carry out all the due diligence checks they need to and are less eager to accept self-certified borrowers because this has been one of the causes which have led us to the current state of the market here.

So, what is the real picture you are going to ask me? While it is true that overall new home sales are down compared to the same month’s figures of a year ago we have to take into account the factor of foreclosure releasing a lot of competitively priced properties in the market plus the length of time required to complete a purchase.

The real estate market has slowed down a little in terms of growth but it is not shrinking by a long shot. As we are heading towards the end of year the figures will begin to rally a little and there will be a partial recovery. It is safe to say perhaps that the real estate market will be like this for some time as lenders and borrowers try to avoid the mistakes which have led to the current level of foreclosures and that, in my book, is a good thing to happen for everyone concerned.