Things appear better than a year ago, but the reality is much different, the problems persist

By
Real Estate Agent with Kensington Realty Group, Inc.

Home values have dropped by 50% across the board from their highs

Foreclosures are still relatively high

Strategic Foreclosures are on the rise

Borrowing money is still difficult for most buyers

But the supply is low because banks are trying to work with or help people (too a degree) as well as stablize the market. 

The question is will this simply prolong the agony (over a longer period of time) and or truly change the dymanics so that owning a home is no longer a risky venture.

No one really knows what the future holds, but it does not look as rosy as what the media wants us to believe or for that matter most agents.  Buying a home is a long term investment once again, the days of flipping real estate (I think) are almost over....back to the basics!

Posted by

Michael Kirch

Broker

Kensington Realty Group, Inc.

DRE #01227726

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Rainmaker
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Vicki Pedersen
Pedersen Real Estate - Riverside, CA
Providing Exceptional Real Estate Service

I agree with you especially about inventory being so low.  Where I live in Southern CA, the inventory of houses for sale has dropped by almost 65% in the last 18 months.  It is making it really hard for buyers. 

May 12, 2010 05:14 PM #1
Rainmaker
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Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Michael - While I agree for the most part, I do disagree about flipping.  I am seeing a lot of flipping down here in Los Angeles & Ventura counties.  While it's nice that FHA has waived the 90day seasoning rule, down here, I'm seeing scenarios of investors who are buying properties in bulk, which is greatly reducing the price per property. 

They then drop a little into the properties to make them habitable (minimum amount of work) and then turning around and selling them at market value, which ends up being anywhere from 50% - 100% increase from the last sales price to the current sales price.

I've had two scenarios like this since FHA changed the guideline in February and I've had Realtor friends and fellow MLO's who have had this same scenario happen to them too.  Don't know if it's a trend yet but it is getting more common.

May 12, 2010 05:48 PM #2
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Rainer
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Michael Kirch

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