futuremd
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- Jul 18, 2012
Just curious, why do people expect those prices to return? Weren't they overpriced to begin with?General response regarding real estate:
I've been in the business for 8 years. While the market is not what it was and whether it will continue for an extended period of time remains to be seen, it has most definitely stabilized and is at a level where we can seemingly restart.
Every market is different, from state to state, county, city/town, even neighborhoods. My market (essentially 3 counties) is actually strong right now. Naturally the market slows into the winter due to kids & school, the holidays and at least here, the winter and snow. We also see a change in the market around presidential elections and even though we were seeing really good signs of a recovery in the housing market even last year and a ton of activity in the spring, I was very cautiously optimistic 6 months ago because of the election. Buyers tend to take the wait and see approach now but activity has been incredible.
We've seen increases in sales and prices (though slight) every quarter dating back to last year and inventory here is the lowest it's been since 2008. The market had been saturated, thankfully we hadn't been hit by foreclosures as badly as most areas but short sales remain an issue...the buyers are still buying, rates are low and it's a positive that the mortgage qualification process has become much stricter. The market was artificially inflated and prices needed to be corrected, it's been difficult for a lot of people who bought at the peak or believed their property to have a certain value and saw that equity as money in the bank, which ~20-25% is now gone. In areas with median prices around $500k, that's a lot of money. The only unfortunate part of my market is that property taxes are the highest in the country and are not in line with market values. These homes are now very "affordable" for a lot of people here but when you figure in at least $1k/month in taxes alone for single-family homes, it's tough.
In terms of government incentives, what exactly are you talking about? In terms of programs, FHA loans?
The other posters are right. There's a steady amount of investors that see distressed properties as a huge opportunity now. Even if it's not a matter of immediately flipping them, they're creating their own small business and either renting to those that either have been affected by the economy (lower wages, short sales & foreclosures or even divorce, other financial hardships, etc) and cannot qualify for a mortgage now or just are not in a position to buy. For these investors, renting these properties allows them to make money on a monthly/yearly basis until they feel the time is right to sell. And there's even just your typical buyer who sees the opportunity to own for less than or slightly more than renting a comparable property.
I could post a ton on the topic and there's no doubt certain areas are not seeing positives in the housing market but as a whole, there are at least signs of legitimate stability now if not improvement.