Pretty scary CNNMoney chart above...and what makes it all the more scary is that for the past 6 months or so, prices here have stabilized or even increased a bit. This may sound contrary to news you see on TV or read in the local paper...but working every day in the market with both buyers and sellers I have seen pricing stability/increases myself. BUT...this is only because of the 2 big govt. market supports currently in place; 1) Homebuyer tax credits and 2) the purchasing of MBS in an effort to keep mortgage rates low.
On March 31st, the Feds program to buy Mortgage Backed Securities expires and on April 30th, the tax credits go away. On top of that, there is every expectation of an increase in foreclosures and short sales actually hitting the market as HAMP has failed and HAFA seems to be set up to increase and speed up short sales.
So, think of it this way...if CNN, through their research, is predicting an almost 25% decline in home values in our immediate area for the Sept '09 - Sept '10 year AND we have not had much, or any, decline from Sept '09 until now...all I can say is "watch out below"!
Mark my words...you are going to be reading reports in the 3rd and 4th quarters of 2010 (look-back reports) with headlines like: Huge UNEXPECTED Drop in pending home sales...Distressed Property Inventory Surges! All of the "so called' experts are going to report their "suprise" at the dramatic drops-off.
And...this solidifies what I have been preaching to owners thinking about selling, or current sellers holding out for a higher price: Your window of opportunity is closing rapidly...If prices drop even half of the CNN prediction, how long will it take to get back to the price you could get for your home today? If you could get $300k for your home today, and CNN was wrong by half...your home would be worth $263k next year...to get back up to todays price of $300k, your home has to rise in value by about 14%! Realistically, if the decline stopped completely once you reach the $263k number and home values resume an optomistic rate of appreciation...lets say 4% a year...it would be 2015 before your home would sell for $300k! (Case-Schiller Index: Nationally, the price of existing homes increased by 3.4% annually from 1987 to 2009, on average). And if CNN is CORRECT...you're looking at 2018 to get your same $300k that you could get today.
Sellers...the time is now...and the time is running out! Please call us if you'd like to discuss our current market analysis of the overall trends and for your specific Subdivision and home.
Thanks for reading,
