It looks like Our Favorite Uncle has done it again!
There is a great article in the Wall Street Journal today that quotes a Goldman Sachs source who states that the Federal first time buyer tax credit boosted sales by over 200,000 units...that's a whole 'lotta homes!
Unfortunately, in the process of boosting sales Washington caused shortages of affordable homes and drove prices up about 5%...that's my government at work!!!
And, the huge FED purchases of mortgages have driven the average mortgage rate down about 0.3% below where it would be expected...and that purchase program will end next spring...so expect a half-point rebound in mortgage rates...these folks are just full of good news!
The article also goes into the problems with Loan Modifications and the glut of foreclosed homes that are still out there in "Real Estate Limbo"...there is also a Must Read section on proposed legislation to slow or stop foreclosures.
While the sales increases are nice and prices have stabilized in some areas...here is San Diego County there are plenty of the ugly "Bidding Wars" we all know about and they mention in this article. The author goes on to say the long term outlook is for an additional 5% to 10% decline in average prices through next year.
Unfortunately the article doesn't state any specific areas for the price declines...it certainly doesn't look like declines are coming in the North San Diego County area....especially in Valley Center or Escondido...we were the first area into the mess and have average declines here over 40% from the peak...great for buyers...so we are seeing home mortgage payments at less than rent...hard to believe that prices can fall much past the "less than rent" point...we will see!
So...if we can believe these WSJ folks this really is a great time to buy...again proving the old saying, "It's an ill wind indeed that doesn't blow at least a little good"
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