Predicting the turn of the market…
The Real Story…
News and commentary about the real estate market and related topics.
Dave Parrish, ABR®, CRSA, CSP, GRI, ePRO®,REALTOR ®, RealtySouth
The opinions expressed here are my own and don’t necessarily represent those of HomeServices South.
Predicting the turn of the market…
Whether you are looking at the real estate market as a buyer or a seller… an investor or a homeowner, there is the desire to know where the market is and how soon will it turn. As a pilot and sailor, I can tell you that turns are setup and begin before the results of those forces become visible. And so it is with the real estate market.
It has been said (although the origin is in dispute) that a picture is worth a thousand words. With that in mind consider the graphic here that shows a trend that you’re not hearing about in the national news.
Housing Market may be bottoming out
The 20 Cities: Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, Washington
It is interesting to note that the 20 cities include some of the cities known to be the worst-of-the-worst real estate markets in this period of crisis… the first to enter the depths of the real estate crisis.
Could it be that these cities are like the canaries in the mine… the early warning of danger and perhaps opportunity as well.
Having said that, I must add that real estate is hyper local. Knowledge of national trends does not replace the need to know the local trends and market conditions. However, they can be signs of things to watch for… perhaps an early warning system of sorts.
A useful site to visit if you’re interested in getting real and hyper local market information about your neighborhood is:
http://HomeValuesInTrussville.com
Now as usual, I’ll tell you that The Real Story is almost always more complex than a single fact. And so it is again this week.
Historically Low Mortgage Rates
Rates for a 30 year fixed rate mortgage in Alabama (Yes, these rates do vary from state-to-state) on October 1, 2010, were between 4.25 and 4.5%. This is more than a full percentage point cheaper than they were a year ago.
A 20% reduction in rates… provides a corresponding increase in buying power for the same monthly payment.
When qualifying for a home purchase the factor that ends up being the driving factor is how much will your budget allow for housing. Now that number really isn’t an arbitrary number. It will usually be the number that the lender approves as the amount of monthly debt they will allow you for the purchase of a home. Let’s say that number is $1000 per month.
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