When a Downtown Fullerton home owner asked me what I think will happen to the Fullerton real estate market in the six to twelve months, I thought it might make for a good article.
The answer depends on so many factors; a major one being foreclosures, or lack there of. Many banks still don't seem to be foreclosing. Between the loss the banks incur (when the home is actually sold), home owners working to stay in their homes, bankruptcies and lawsuits are just some things keeping the banks at bay. We have been anticipating that they will start foreclosing for years now but so far we really haven't seen it happen. If the banks DO start taking these homes, it will increase inventory. That is bad news for sellers because the more homes that are on the market, the more competition your home will have and the prices will continue to decline.
Rates - If rates remain low this is great news for buyers AND sellers! When money is cheap (and right now it is), buyers can afford are higher priced home.
Some economists predicted in 2007 that 2008 would yield higher prices and we know how that turned out. Some say that we will stabilize in 2012, others say 2014 and some say it could take 10 years. So much depends on factors that are just completely out of our control.
Home prices escalated so furiously from early the early 2000's that some say we still have a lot more correcting to do, yet some say that we may see interest rates near 1%. Rates at 1%? Sound crazy? Well, 15 years ago, you might have thought it crazy to hear of rates in the low 4% and even high 3% range; but we've seen them!
I find it interesting that when potential sellers talk about the short term market, they are pretty sure it will increase in the next 12 months but buyers on the other hand are certain that we have not yet hit the bottom. The funny thing is that if the buyer's don't buy, it becomes a self fulfilling proficy because it WILL drive prices down!
The bottom line is that no one really knows. We have never been in a market like this where there are so many extra factors such as government involvement. While we can try to make educated guesses, one thing I do know is that the future is uncertain. Will home prices go up or down in the next year? No one really knows. You can guess or speculate, but at the end of the day do what is right for your family and home values WILL increase...sooner or later.
Comments(1)