How you approach this declining market, sub prime lending fiasco and liquidity meltdown is the key. I can only relay what we have found here in our local market as we study recent past sale data. Do not confuse what you hear on the national news programs with what is happening locally. Locally what we have seen are some foreclosures and some homeowners that are in some financial trouble. Not every home with a "for sale" sign is in foreclosure. As a very general rule our local market has lost approximately 5% last year.

Gone are the days of using your home as an ATM machine. A lot of the population would if their spending practices or a need for a major purchase out weighted their income would just call the local finance guy or gal, refinance and the cycle would begin again. What has happened is this, 2 years ago if we sold 100 homes in a year 25 of those sales were investors or home remodelers, they are all gone now and out of the real estate investment game. 25 of those sales were sub prime. People who can afford a home as long as interest rates never go up and appreciation continues and if the need arises refinance and start the cycle again. Appreciation has not only stopped but as a general rule gone down by 4-5 percent this year. ( some neighborhoods more, some less, consult a good real estate agent.) So now we have ½ of the buyers we had before and the same, if not 10 percent more homes on the market now then at its peak. Over the last several months we had noticed that the inventory of homes on the market their numbers had gone down and contracts taken had gone up. With the Spring market around the corner we expect this cycle to reverse leading to a downward pressure on sellers again this Spring and Summer, but a good sign that things may be changing. We have also noticed that buyers are experiencing some very unexpected trouble obtaining loans. A good experienced full time agent should be able to navigate these waters. I expect a very trying market again this year.

The good news. This year over 5 million resale homes will be sold. Homes are selling but gone are the days that a seller can just add 5 percent appreciation a year, do nothing and realize a sale and profit. There are to many homes to choose from that have upgraded staged and have great curb appeal that will sell first and there are only ½ the available buyers.

The bad news. Some houses are just not going to sell. The reasons very. We will go into these on our next blog. Stay tuned. Any questions please ask.