Call me and we can discuss it more.
The head economist for Fannie Mae isn't subscribing to the price appreciation:
â€œTemporary tax credits change behavior temporarily,â€ Duncan said today at a National Association of Real Estate Editors conference in Austin, Texas. â€œItâ€™s simply shifted demand forward.â€
â€œIt actually created some price appreciation thatâ€™s not supportable long term,â€ Duncan said of the tax credit.
The key is this, if supply goes up then prices go down. Supply will go up because of foreclosures (which many times are caused by unemployment another factor in the housing market and every other market) then prices will go down. If interest rate goes up (donâ€™t forget about all of that money that the government printed) then affordability will go down and many people will not be able to purchase the homes that they could nowâ€¦.causing demand to go down and supply to go up.
So if the supply remains as it is now about 3 month of inventory and interest rates stay between 4.75-5.25 then the homes will go up in price. If that changes and inventory increases and interest rates go up then the housing prices will go down.
In all three cities these are the numbers:
Currently for sale:
208 Standard Sales homeowners have equity
72 Short Sales
Only 33 Bank owned homes
2 Probate Sales
Went Pending last month:
Sold last month
With numbers like this it is a sellers market - we can say if not one more home went on the market inventory would be wiped out in 3 months. The only way the prices will come down is if we get more inventory.
Interest rates dropped to 4.75% giving the buyers more purchasing power and possibly looking at a slightly higher priced home or attacting even more buyers to the market. We still have the California tax incentive so the buyers remain out in hoards.
A lot of the properties that are in the foreclosure process are modifying. Many homeowners have done this on purpose to get the banks to work with them. They are contracting lawyers, fiing for bankruptcy, or I have even heard selling the note to an investor and buying it back at todays prices from the investor.
So with the lack of inventory prices will not take a turn down in the cities you selected. Keep in mind this is a city by city scenario. Victor Valley areas and parts of Riverside are not in this same situation.
Think housing is recovering? Think again.
One critical obstacle to a housing recovery remains intact: supply. Until the number of empty homes starts to shrink, prices could still fall further.
Moreover, notes Joseph Foudy, a professor of economics and management at NYU's Stern School of Business, we're coming off of an artificial bump from the first time home buyer credit, which expired last month. He predicts the second half of this year will see sluggish economic growth and that housing prices, at best, will be flat for the next few months, while commercial real estate "is likely to see significant declines."
concerns in Europe could end up destabilizing housing prices further, which would dent consumer confidence -- not a good cycle to begin a recovery.
Moody's forecasts about 1.9 million homes will be taken from their owners this year, with a little over a million more going back to the banks in 2011. These can be added to the 6.3 million vacant homes currently sitting idle across America.
Thank you for your interest.