Last Winter we were predicting rapid sales this spring, because of the pressure on pricing from banks unleashing large volumes of forclosed properties over a relatively short period of time. This did not happen exactly as predicted, because of the now infamous "robo-signing", which was seemingly just a lazy and improper way for mortgage companies to relieve their books of an abundance of foreclosures. Or as Fannie Mae phrased it:“Our foreclosure rates remain high. However, foreclosure levels were lower than what they otherwise would have been in the first quarter of 2011 due to the delays caused by servicer foreclosure
process deficiencies
and the resulting
foreclosure pause.”
Although sales have been strong, an odd thing has occurred. May sales dropped below expected levels,because of a lack of supply of foreclosed and short sale properties. This meant that the investors were temporarily dropping from the market and home sales were "normal" sales. We actually saw a rise of "Short Sale" prices from 85% of market value to 90% over the past quarter because of a shortage of supply. Our area showed a leveling out of home prices over the past few months. The next 90 to 120 days will probably be the best time to sell your home, because the mortgage companies are expected to unleash the pent up forclosure or "shadow market". When this happens, these will become comparables and competition for all homes on the market, which will place a downward pressure on prices. This will and should bring investors out again.Many forcastors are pedicting historic record numbers of home to be sold. This will be necessary to clear the market of 'bank involved' sales. Then by the 2nd quarter of 2012, prices should rise and we should see a much more normalized market.
It is important to realize that if you have your home for sale or are thinking about it, that what what might seem a loss on the value of your home will be made up in the next home you purchase. Many buyers are buying into homes that they could not previously purchase and the mortgages will be low, because of the price and our current interest rates. Which is different than the circumstance that brought us into this market. Home prices will be what are affordable, not just mortgages. It is an opportunity to buy your dream home. And though you will certainly see large equity gains in 5 years, it is important to change our focus on why we buy homes; a home should be our castle, our safety, our security and our haven - I believe we need to stop viewing them as get rich investments. Real Estate is a commodity and not a product. prices will go up and prices will go down. bubbles will rise and bubbles will burst. But the place your family lives is home.
