A new article in Wisconsin Real Estate magazine January 2010, we are starting to reach our historical median norms for Wisconsin. While these are market and price range specific, it appears that home price have fallen back close to a normal range. In our local area of Appleton, Neenah, the Fox Valley and NE Wisconsin, I have seen this happen, but most experts locally say a 3-5 % reduction is still out potentially there in the median market price range.
I think the price downward slide from "Sub Prime" lending has slowed. In contrast, the effect of "Option Arms" is not over and really has yet to begin. Statistics from Amherst Securities states these types of loans will not peak until January 2012. In Conventional loans Q4 data shows nearly 10% are behind by at least one payment and Sub Prime is nearly 40%. Wow! The largest growing sector is 1 million+ dollar properties because tight lending policies have limit funding for these homes. In a nutshell, we will continue dealing with foreclosures and short sales values affecting the retail market.
On the positive note, the federal tax credit is helping demand. Home Affordable Modification Program (HAMP) programs may make a dent...but this is program is based on helping people that are struggling with but still making payments on underwater house values. HAMP does not appear to be designed to help those behind on their payments. FHA has eased lending policies, and their 90 day flipping rules.
Till next time,