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.
Market Conditions Update…(Reality 2.0)
Since the expiration of the First-time Buyer & Move-up Buyer Tax Credit program, traffic in the real estate market has been slow… But then that’s not a huge surprise. While the tax credit certainly caused some people to buy that otherwise may not have, it by enlarge was an incentive to act within a certain time period. To that end it was successful…The buyers of Summer bought this Spring! So summer traffic has been slower than usual… though not substantially slower than expected.
The consensus has been that traffic would pick-up this month (it’s that pent-up demand thing)… and indeed traffic has been more brisk than it was in the May, June, July period. However, sales aren’t being consummated, as it seems everyone needs to sell before they can buy! The chicken and the egg thing!
Homes are still selling albeit at lower and lower prices…
While sellers have begun to be more realistic about pricing their homes based on the market, prices have continued to fall… and there is no logic that would lead me to predict that the fall is over. It has however become less of a steep fall that it was in 2008 & 2009.
Even so, there continues to be pressure on pricing caused by:
- More foreclosures & Strategic Walk-A-Way’s,
- Appraisal pressures (tracking the market)
- High supply, low demand!
The most likely thing to change this trend is J O B S!
New housing starts are still at near an all-time low, which means that discounts on new homes is considerably less than on re-sale/existing homes due to the low inventory for a buying public that still seems to favor new over previously owned. It’s the supply and demand thing!
Interest rates are incredible… low 4’s for good credit on a 30-year mortgage! Now folks are saying rates might go a bit lower… But don’t wait… this won’t last forever. They are already at historic lows!
It’s definitely a Buyer’s Market… Great rates, low prices, large selection, favorable terms. They just need to buy!
And buy they will because most people buy because they need to… due to:
- Changes in family status: Marriage, Divorce, Birth, Death…
- Job Transfers,
- Health and safety issues
- Better school system, neighborhood
- Substantial changes in economic situation
Long term, the outlook is that we are likely to see more of the same through 2013. Followed by a relatively flat market, then a period of slow growth 2-4% appreciation rates. Based on that outlook, it would look to be near 2020 before housing values return to Today’s level.
Now many may say I’m really being a “downer” here… But the truth is you want the Real Story not some watered-down Pollyanna version of what’s going on in the market. Armed with this truth you will be able to make the decisions that a right for you!
May the Market be with you.
