It seems as if every nightly news report has a section titled “real estate crisis” or something to that effect. It has been widely speculated that the S&P/Schiller Case Index is skewed since it tracks prices in only twenty major markets, of which many have had the most dramatic price appreciation and the most dramatic price compression. The S&P/Schiller Index claimed that median prices were down 12.7%, whereas the National Association of Realtor’s reported that the median price was down only 7.7%. These figures may have an undeterminable margin of error and inaccuracy due to the nature of the market. If more properties are sold in a lower price range than in a higher price range, the median price will decrease. With the market for jumbo loans being nearly frozen, it makes obvious sense that many properties being bought and sold will most likely come from the lower end of the price spectrum. So be prepared to question the very general figures that are being disseminated through the media and have a trusted realtor review comparable sales in your area since every market is different.
Keep in mind that I am not stating that prices aren’t decreasing. Seller’s are finding out that buyer’s are not willing to pay “2007” prices. There has been downward price compression, but seller’s who have the luxury of pricing their homes at reasonable levels are garnering offers at asking prices or higher. Even bank short sales that are priced below market prices are receiving a lot of attention. A
Buyer’s who have been priced out of the market for the past few years are beginning to take notice. With interest rates still at relatively low levels and a large inventory of homes, the right time may be right now. The bottom line is that new buyers should work with a realtor to find out what opportunities are available in their local area.
Wishing you wealth in all its greatest forms.
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