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Hi Michael,

Coming in late to this question, but since I am in NH I felt I could at least provide some insight for you regarding the local market and the impact that credit and interest rates are having.

I think that the sales prices are always going to respond to changes in credit and in rates. However I feel like this has only been a positive thing for our market.

Honestly if we had seen prices continue to escalate as they were and had buyers out there getting loans that they were really stretching to afford we could have ended up in a far worse situation.

Yes, prices have levelled out, loans are harder to get. But this is not a cause for dismay. This is going to lead us into a normal market with safer lending practices. That is what we really want to see. We need stability.

Right now I feel like we are in a good place overall. I see prices that have come down, levelled out and are becoming for the most part, more stable. I see lenders that are being a little more strict with their practices.

This, especially with the recent rate drop, makes it a good time to buy. We are nearing, in my opinion, the level ground in prices, and now there will be a slow steady normal appreciation rate. While that is not appealing to some people who long for the days of the 10% (or more) appreciation a year kind of market, I feel like it is a safe, sane, market that won't lend itself to bubble bursting kinds of prices.

I generally agree with Ellen, she tends to provide a very complete piture for questions.

I am from Marin county, the S.F. North Bay area. For us, most of what Ellen said is true, however, the tightening of credit have not had much effect on the higher end housing market. As those houses are generally not first time buyers, have more equity in their house, or in gneral, just high pay owners They tend not to be affected by the flunctuation of the interest rate.

As a matter of fact, Souther Marin (with more the higher end inventory) and higher end North Marin are doing quite well with some properies going for multiple offers still.

Some of the sellers just take their houses off the market waiting for the market to come back, which in turn lower the housing supply... guess what effect that will have.

Well Michael, I'm located in the Bay Area but I think the tightening of credit and lending standards has had an impact on real estate in general. The reason being that because credit and lending standards have gotten stricter, the pool of qualified buyers has shrunk. With less buyers available and as many properties are being listed now, there is now a surplus of inventory on the market. The principle of supply and demand will make the real estate market react in just the way you described--the sales prices will begin to fall in order to attract the remaining qualified buyers.

This is the predicament that many sellers are in right now. They have to continuously slash prices in many places to compete with other homes that are selling and in order to have a chance to be sold on the market. It is now a buyer's market and sales prices are falling. Hope this helped, and if in the case you are selling your home, I wish you the best of luck! Find a competent and trustworthy Realtor, that is your best bet in this tough market.