Real estate buyers and sellers are you confused about what's going on in the real estate market? It's a lot to digest right now. Lots of conflicting stories out there.
Here's the facts.
Fact #1 - Real estate prices have dipped back to post crash low levels. This is what's known as the dreaded double dip. Economists and experts see this as the recovery having lost its momentum.
Fact #2 - Interest rates are still at record lows, often times below 5% for certain buyers and depending on lender.
Fact #3 - Housing prices are fluctuating. Depends on your market too but some reports have sales increasing on existing homes, others have prices declining. There's a lot to report here but we'll discuss what it means.
Fact #4 - Banks have record levels of distressed properties on their hands. This is the most important point. We can't recover until these make their way through the system. Our existing buyer base needs to absorb this inventory so we can have stabilized levels of housing and prices can again appreciate. However our kick the can down the road atittude is prolonging this problem. Each month that a home sits, it causes more blight to neighborhood, takes on more damage, adds to existing inventory (shadow inventory) and takes up space on bank's balance sheets.
The window - The is the short term phenomenon we are seeing right now. Retail home sellers (non-distress sales) have a short window this summer to sell their home at optimum levels. Traditionally home sales are increased in the summer months. Buyers are very active and interest rates are low - see below. Given that levels of distress properties actually on the market are way down, sellers have a chance to compete and sell if priced right. In a few months, more foreclosures will hit the market and drive prices back down.
Buyer's market - This is turning into one of the greatest buyer markets ever. Many opportunities are available to creditworthy owner occupants and investors. The longer we kick the can the longer we will see this buyers market.
Have questions about economics or the housing market? Suggestions for future topics? Email us at email@example.com or visit us on the web where you can also search for Indianapolis homes at www.indypropertysource.com.
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