Home prices are down 35%, but that is fueling a rise in home sales. This is what I’ve been talking about people! On Wednesday there was some good news for California, which has been one of the hardest hit states in the housing crisis, when a local realtor group said that sales there jumped 18% in May compared to May 2007. Just in case you didn’t catch that, sales are up, which means we are entering a buyer’s market, which means all you people who stayed out of the housing market over the past eight years because it was so overly inflated finally get your chance to own a home! Real estate appraisals will now reflect home values that are realistic instead of the ridiculous appraisals from years before that saw home appraisals going for no less than $500,000. But, before you all humiliate yourselves doing the happy dance in public, we do still have a way to go.
Prices took a beating, plummeting 35% during the same period, which is bad news for people in the housing market looking to sell, but it’s exactly why prospects are looking brighter for people in the market to purchase real estate. Home sales exceeded 400,000 (on an annualized, adjusted rate) last month for the first time since early 2007; the reason being is that more and more people are finding themselves in foreclosure H—, which means the banks are desperate to get rid of real estate they thought they had already sold. May was actually the second straight month of increased sales volume in California, but that followed a disastrous string of 30 consecutive months when sales saw a steady decline. So, what should you do, if you are looking to purchase a home?
What we’re seeing right now is a case of Californians in a state of bargain hunting nirvana. With so much excess real estate lying deserted in the housing market, smart shoppers are looking around for the best deal, and with the help of honest real estate agents, mortgage lenders and real estate appraisers, they’re finding them in spades. That being said, not everyone is convinced that the time is right. Jonas Lee, a principle of New York-based Redbrick Partners, which buys distressed properties all over the country, says he’s watching California closely, but isn’t ready to jump into the fray just yet. It’s kind of like the stock market, you want to buy low and sell high; the trick is in knowing the best time to get in, which is why you must do your research.
Many experts in the housing market have been monitoring sellers of bulk REO (bank repossessed) properties and their prices have gotten more realistic, but they’re concerned whether this is the end. Again, this is a case where having a professional team of real estate agents, appraisers and lenders on your side will help you out, because they can guide you through the intricacies of the housing market.
So, while we may be a ways off from a buyer’s market housing bubble, we are definitely headed in the right direction. Be smart, choose your real estate team wisely and you might just be the next person to grab your piece of the American Dream!
If you are considering a home purchase, please visit us at Mahler & Associates Appraisal Services for help with your real estate appraisal