Real Estate Cast for 2009!

By
Real Estate Broker/Owner with RE/MAX Around Atlanta

Not all real estate is local. Pummeling housing prices in your nabe is the same thing that's hurting them around the country: the credit crisis.

You know how it works - banks' troubles have made it harder for many home buyers to get mortgages, and those who do qualify have to pay more. A borrower with good credit and a

Home prices in the nations 10 biggest metro areas are projected to keep falling in 2009, with Miami and Los Angeles suffering most.

Metro area

2009 median home price

2009 change

Dallas

$155,645

-1.0%

Houston

147,549

-1.8

Atlanta

150,092

-2.5

Chicago

239,359

-5.3

Philadelphia

201,151

-9.8

Boston

295,918

-12.5

New York

393,210

-13.7

Washington

261,411

-17.1

Los Angeles

269,614

-17.2

Miami

214,551

-18.8

Notes: Prices are projections for the end of 2009. Change is from the end of 2008.

Source: Moody's Economy.com

20% down payment recently got an interest rate of 6.7%, on average, according to HSH Associates.

This rate is not historically high (rates often surpassed 9% in the early 1990's). But it's more than the 6.2% that the same borrower would have paid at the beginning of 2008, and you thought rates where going down!

The fact that mortgage rates have remained stubbornly elevated despite the government takeover of Fannie Mae and Freddie Mac leads some experts to believe that those rates are not headed down.

A fact that 18.6 million homes in this country are now sitting vacant, more than at any other time since the Census Bureau began tracking that figure in the 1960s. And that 2.8% of U.S. mortgage loans are now at least three months late, up from 1.4% a year ago. That rate is projected to be up in early 2009.

Sorry friends, addsl to another lousy year for real estate.

Home prices are down 20% nationwide since their peak in July 2006, according to the S&P/Case-Shiller home price index. Economist Nouriel Roubini of New York University, who accurately predicted the housing slide and credit crisis, expects another 20% decline in home prices next year. Patrick Newport of economic forecasting firm Global Insight projects a 15% drop. They predict the market turning until late 2009,

" The wild card: How much home values fall early in the year

With values droping investors can start renting out homes for enough to cover their mortgage payments, we could see a wave of people snapping up bargain houses in 2009 - which could push prices higher by the time the next 12 months draw to a close.

Lawrence Yun, chief economist of the perpetually optimistic National Association of Realtors, says he expects prices to rise 2.8% in 2009.

Action plan if you're selling:

  • Wait it out In 2010, real estate should be stronger, with fewer homes clogging the market. So if you can wait until then to sell, do it. "
  • Make your place shine In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home. To convince buyers that your house is worth paying up for, make sure that it's in move-in condition (foreclosures almost certainly won't be). Point out unusual qualities like wide-plank floors or stained glass that cookie-cutter new construction lacks.
  • Price it below market Go to Zillow.com to see how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.

No more pricing to see "what happens", Price it right the First Day! That's becaus lower prices attract more buyers.

If you're buying: eLook for homes that have been sitting around, Hire a ABR agent

In many areas of the country, such as Phoenix, San Diego and Washington, D.C., it's common for perfectly good homes to linger on the market for nine months or more. So start your search by looking for properties that have been up for sale for at least four months: At that point most sellers will be willing to deal. Drive a hard bargain when you find a house you're interested in. Sellers know you have a lot to choose from. They also know that if they wait they will probably get less. So offer less now.

  • Improve your credit score More than ever, that three-digit number could cost you. Lenders have begun imposing fees for everyone who doesn't fall into the top tier of credit - and that's a whole lot of people. "Let's say 680 got you the best rate on a mortgage 24 months ago," says John Ulzheimer, a credit expert with Credit.com. "Today you need to shoot for 780 to 820 to get the best deal." Boosting your credit score from 660 to just 740 can lower your mortgage rate by a quarter of a point. To improve your score, focus on paying down debt, which will bring your crucial debt-to-credit ratio down.

For more details Call LeAnne Long, 770-851-0380. Fast Facts from Money.com and NAR

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