All over the
United States home prices are continuing to fall as the
subprime
mortgage mess continues.
The National Association of Realtors forecasts that
home
sales will drop by 100,000 this year; 2% from the 6.48 million homes that sold
in 2006.
Home prices are also projected to fall .7% this year, which will be the
first recorded annual drop in the real estate market EVER!
Subprime mortgage companies issue creative financing so people can stretch themselves
into a loan while making minimum or
interest only payments. After years of strong
earning by these large companies the subprime market as a whole has taken a turn
for the worst. Over 25 major lenders have left and the rest of the industry is
feeling the heat. This has caused all other mortgage companies to tighten up their
standards and many types of
loans that were available are no longer being issued.
Without
financing for buyers on the lower end of the real estate market prices
must dip to accommodate the working class budget. In many areas of the country
people find themselves squeezing into properties with payments nearing 40% of
their income.
Housing prices of this kind have caused many of the
foreclosures
that are occurring and the shut down of the subprime industry.
Many sellers offer incentives and discounts to spur buyers into action but potential
home buyers are still feeling
real estate home prices are too high. This mentality
could cause the market slowdown to continue another year or so until
incomes meet
the price of mortgage payments. Home shoppers are still looking, in fact with
today's Internet ability to search for property on-line people are doing
more shopping than ever. Could this also be why people are slow in buying?
Overtime the problems in the subprime mortgage market could lead to a
stronger
housing market as people get into
safer mortgages and
foreclosures decrease. Foreclosures
cause the other properties in the area to weaken in value and cause lenders to
tighten up.
Nationwide home prices and sales will vary. Certain areas will see an increase
in property values but the national average will be outweighed by areas that saw
astronomic increases in 2004 and 2005.
Builders have been hit very hard by this dip in the market and will continue to
have to offer incentives to buyers to keep their sales up. Analysts say new home
sales will be hit the hardest this year while existing-home sales remaining steady.
The housing market should begin to rebound in 2008.
Top 5 Areas for Price Increases
• McAllen, Texas
12-month forecast: 9.8%
Median home price: $130,000
Median mortgage loan as a percentage of income: 25%
Five year price change: 26.5%
Worst one-year decline: -12.3
Year of worst decline: '88-'89
• Tulsa, Oklahoma
12-month forecast: 4.3%
Median home price: $135,000
Median mortgage loan as a percentage of income: 14%
Five year price change: 17.6%
Worst one-year decline: -7.5%
Year of worst decline: '86-'87
• El Paso, Texas
12-month forecast: 4.3%
Median home price: $130,000
Median mortgage loan as a percentage of income: 14%
Five year price change: 17.6%
Worst one-year decline: 17.5%
Year of worst decline: '87-'88
• Scranton, Pennsylvania
12-month forecast: 3.9%
Median home price: $118,000
Median mortgage loan as a percentage of income: 13%
Five year price change: 41.2%
Worst one-year decline: 7.2%
Year of worst decline: '94-'95
• Rochester, New York
12-month forecast: 3.7%
Median home price: $122,000
Median mortgage loan as a percentage of income: 11%
Five year price change: 22.3%
Worst one-year decline: -4.1%
Year of worst decline: '94-'95
Bottom 5 Areas for Price Reductions
• Las Vegas, Nevada
12-month forecast: - 8.9%
Median home price: $325,000
Median mortgage loan as a percentage of income: 33%
Five year price change: 119.8%
Worst one-year decline: -17.0%
Year of worst decline: '88-'89
• Miami, Florida
12-month forecast: - 8.8%
Median home price: $335,000
Median mortgage loan as a percentage of income: 41%
Five year price change: 149.3%
Worst one-year decline: -4.3%
Year of worst decline: '88-'89
• Nassau/Suffolk, New York
12-month forecast: - 6%
Median home price:$483,000
Median mortgage loan as a percentage of income: 31%
Five year price change: 76.3%
Worst one-year decline: 6.6%
Year of worst decline: '88-'89
• Phoenix, Arizona
12-month forecast: - 5.5%
Median home price: $271,000
Median mortgage loan as a percentage of income: 26%
Five year price change: 103.8%
Worst one-year decline: -6.0%
Year of worst decline: '81-'82
• Fort Lauderdale, Florida
12-month forecast: - 5.5%
Median home price: $325,000
Median mortgage loan as a percentage of income: 31%
Five year price change: 128.4%
Worst one-year decline: 3.1%
Year of worst decline: '88-'89
My local
San Luis Obispo County Real Estate Market on the
Central Coast of California
has seen significant drop in sales since the real estate boom of 2004 / 2005.
Today alone there were 31 price reductions, 1 price increase, and 7 solds.
In 2004
there were 4224 properties sold at a median selling price of $454,950, $4050 under
the listing price and after being on the market for only 35 days. Below shows
how these statistics have dropped.
-----------------------------------------------
• Homes Sold:
2004: 4224
2005: 3868
2006: 2939
*2007: 1007
• Median Listing Price:
2004: $459,000
2005: $549,000
2006: $570,000
*2007: $556,000
• Median Selling Price:
2004: $454,950
2005: $539,700
2006: $560,000
*2007: $540,000
• Median Days on the Market:
2004: 35
2005: 40
2006: 65
*2007: 89
*So Far this Year
See more
San Luis Obispo Real Estate
;)
;)
