Low rates combining with falling home prices are making homes more affordable; however, only to those with substantial down payments. Plus, underwriting requirements have really tightened up. Of the number of homes sold in December of 2008, better than 50% cost less than $174,500 nationwide. This is a 15.3% decline from December of 2007 when the median price was $207,000. (National Association of Realtors) Interesting to note too, that nearly 45% of these sales were ‘distress sales’ of some nature.
In the more immediate area though, as an example, the Davenport vicinity declined by an even higher amount, 15.7% (Zillow Buzz – February 2009)
Where are we…? Anyone’s guess really.
On the positive side, there are sales taking place driven by investors with cash picking up bargains which is slowly picking away at the inventory. On the negative side though, is the ‘shadow inventory’ of homes waiting to go to market, and the ‘ghost’ inventory of foreclosed homes owned by lenders sitting empty that are not on the market.
All indications are that we will be in this state for sometime to come. For those selling, patience is paramount. For those buying, the window will be open for quite awhile.
Quite the paradox…
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