Why I think the Real Estate Market is Set to Rebound

By
Mortgage and Lending with Better Homes Realty Granite Bay

Sales in August in California were up 86% in August from a year ago.  Prices were down about 40%... but at least we have people in the showroom so to speak.

The Housing Bill, which was supposed to fix the real estate market last July, only takes effect now, starting October 1, and authorizing the FHA to start refinancing an enormous number of homes..   Inevitably, we are seeing a bottom now - finally.

So where do we go from here?  Do I see a real estate boom coming?  Heavens no.. but at least we should see regular movement in the real estate industry again.  It doesn't help those that are under water... although we have new programs for that now... but it does end the awful cycle of foreclosures.

Here in Sacramento, we are regularly selling homes for basically under $125,000 that were in foreclosure at the $240,000 level.    At $125,000 with your basic FHA or VA loan, the payment works out to be around $750.  There isn't much of a reason for the young kids to start moving out of the apartments and into a home of their own.

I personally think we will see this in a tidal wave, and it should absorb everything on the market very quickly.

We will then see prices rise, as the foreclosures are no longer in stock, and the existing home owners won't have an interest in selling.. as the values will still be low compared to what they paid for the home, we should see a period, after the foreclosures, of very, very tight inventory for a year or two.

- Scott

Comments (2)

Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"

things areound here are moving we are seeing multiple contracts on homes, so I am hopeful that things will get better..

Oct 06, 2008 02:42 PM
Anonymous
Market Rebound

We are actually seeing a significantly heated market in some price ranges and property profiles... if the home is in decent shape, -clean-, and between about $150k to $250k, they move very, very quickly.. usually 5 or 6 days.

Our upper end still struggles... $250k to about $600,000 is about 3 months on market again (down from about 6 to 10 months), though anything over about $650,000 (out of reach of an agency jumbo), is really, really struggling... about a year on market in most cases.

Upper end sellers have basically been in shock so to speak and not lowering the prices, so the gap between the middle-ownership and the upper end is pretty wide, so you don't see many buyers willing to make the next jump in value.

Between the junk being withdrawn, the bank repos going quickly for 70 cents on the dollar, and buyers deciding the deal on a foreclosure isn't always worth the headache... we are finally getting some liquidation in the market again.

California led the country into this though, we slowed significantly in August 2006, and by March 2007, sales were non-existent.   Realistically... we started the third year of this crap, it's presumable that we would move out earlier than other states.

Oct 06, 2008 05:34 PM
#2