By now you know that home values have taken a dip in Spokane. So the million dollar question is: Will prices go lower? When will prices rebound? No one has a crystal ball, and much will depend on our employment rate and the number of foreclosures hitting our market.
A recent CNN Money article predicted home prices nationally could fall another 6% to their lowest point by September, 2011. However, their local forecast has Spokane values appreciating by 3.2% in that timeframe. Also of note, Tacoma, Kennewick and Seattle were among the top five on their list of best bets to rebound, which bodes well for the Northwest.
Several indicators point to the possibility that right now is one of the best times ever to buy real estate in the Spokane area. Average home prices have come down since the peak in 2007, there are many programs offering financial assistance to qualified buyers, and inventory of homes for sale is plentiful.
More importantly, interest rates are still very low, but are predicted to continue to climb as the Federal Government winds down its program for purchasing mortgage-backed securities. On March 31, the Fed plans to end a $1.25-trillion program for purchasing mortgage-backed securities that has helped keep mortgage interest rates near a record-low 5%. That exit is expected to further push up rates--various sources have predicted an increase of 0.5 to 1%. (On a $200,000 30-year mortgage, the difference between 5% and 6% is an additional $125/mo. for principle and interest!)
While I can't predict when home values will rebound, we have seen a definite uptick in buyer activity in the last month. The combination of unseasonably warm weather, low interest rates, low prices, soon-to-expire tax credits and lots of inventory to choose from seems to be bringing buyers off the fence.
As always, if you are thinking of buying or selling, we'd love to help you, and we appreciate your referrals!