I pulled up my old clippings I keep for my radio show and saw a slowing of the market back in 1998. We had gone up some 20% in 4 years and felt pretty hot! Then we all know what happened next and this WITH the DOT.BOMB!! In the SF bay area we lost 350,000 high tech jobs at the BEGINNING of the real estate madness! We still led the greatest state of California OUT of the recession and to the heights of which we now recede. The high water mark is on some new homes in the Phoenix market!!
I count my blessings that we have low interest rates today as the crater which was the late August, early September "Credit Crisis" lingers here in Sonoma County. Are sales are headed for two consectutive months of just barely over 200 total units sold in the County. This is 50% off from year to date numbers. Also, the median has fallen 10%. We had been seeing not a big fall in the median but huge falls in sales.
It's not so much as creating NEW sales but getting a bigger market share of the existing paltry numbers. Imagine rates at 7.5 or 9.5% AND the credit crunch! I shudder to think of it! But $750,000 and above is just doing swimmingly thank you!! So, let's just all work the upper end! One needs to adapt, change and shift our focus--but remain FOCUSED!
I dont even know if they can pull the reins on what they have started. When wall street drops 350 points because they see no more interest cuts in site, you know something is backwards. I feel the media will ride this wave of negativity till some other notable news forms. The only segment i see actually hurting compared to others is the jumbo mortgage market. Everyone else is doing fine. Rates are great, and sellers are selling at a discount due to the media scaring them that it might drop more.
With th banks stepping up and helping to refinance some of the billions of dollars of adjustables, i think they might soften the blow even more. The inventory and foreclosures that were expected because of adjustable loans is softening which i see as a positive.