The abnormal appreciation in real estate prices from roughly 2003 - 2006 came on the heals of a normal growth period that had followed a relatively slow growth period. There naturally should have been a period of slight price declines starting in 2003, but instead there was a spike in prices because some very poor government policies forced and encouraged poor banking and lending practices that allowed a much greater percentage of the population to buy homes with "sub-prime" financial products. Demand for real estate increased, prices increased and new homes were built like crazy.
The only problem was that all these "sub-prime" loans, not surprisingly, did in fact default and a wave of foreclosed homes hit a market that was already saturated with a massive amount of new construction. Inventory shot up eliminating market demand and reaping drastic price declines from 2006-08 Most real estate economists predict the bottom of this down-turn to be sometime in late 2009 to early 2010, varying of course by local area.
CURRENTLY
● Nationally we are at affordability levels roughly equivalent to 2003, and average sales prices in many Northwest WA areas have fallen well below the 45 year average appreciation line.
● Inventory of available homes for sale in many Puget Sound areas has been shrinking consistently for the past 6 months. New construction has almost halted completely and many individual sellers have just reached their own acceptable rock bottom in price drops and are choosing instead to rent their property until prices begin the next up-swing.
● US population growth continues at an astronomical pace, and Washington State population growth is even higher than the National average. Whether renting or owning, people will ALWAYS need to live somewhere and work.
Of course real estate values have always and will always be particularly unique to a very local geographic area. Here in Big Lake and several other key areas I monitor price reductions, new foreclosures and new listings daily; and then I preview the best ones in person for further evaluation. Over-priced real estate is sitting on the market forever but aggressively priced foreclosures, short sales and homes with motivated sellers are often getting several offers in a day or two!
If you would like to see the current, best priced Skagit properties for a positive cash-flow investment or just a great first home investment, email me. And you can always use the free map search on my website anytime to browse the entire inventory of homes for sale in Washington State. Either way, don't let general perceptions keep you from the reality of extraordinary money making opportunities right now in real estate! The long-term trend lines and current market conditions show that we are indeed nearing the end of this historic buyers market.
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