CALIFORNIA REAL ESTATE MARKET MAY HIT PLATEAU FIRST
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
August 16th, 2008
The real estate market in 2008 saw dramatic changes which may lead to a quicker turnaround. Nearly 50% of sales this year are expected to be bank foreclosures. Home prices statewide, have seen a dramatic decline of between 20-50%, depending on location.
This price correction could allow California to lead the country out of the worst market downturn since the Great Depression. The fact that home prices are dropping at a slower rate, along with up ticks in sales nationwide compared to a year ago, indicate price stability may be just around the corner. Some areas are even showing slight gains in home prices. It’s too early to tell exactly where the bottom is, but no one can deny their are some positive indicators out there.
Buyers trying to time the bottom may miss it entirely. The only way to know the bottom was reached is after things improve. Basically, the bottom of the market, just like the peak, can only be determined by studying the numbers in hindsight. It wasn’t until late 2006 that economists pegged the peak as being September 2005.
Price seems to be the focus of most buyers sitting on the fence. As long as prices are declining they sit and wait. Meanwhile, interest rates have been creeping upward ever so slowly. The fact that inflation is running over 5% for the year is putting pressure on the fed chairman to raise interest rates. Thus far, he has indicated he will hold interest rates steady, hoping the drop in oil prices will bring down the cost of gas and other products and services in coming months.
The federal housing bill, HR 3221, signed by President Bush is also expected to stimulate sales and help markets absorb excess inventory. Housing starts fell under a million, for only the 3rd time in 35 years, and every time this has happened before, housing activity rebounded within 3 months. Personally, this downturn is steeper and deeper than any I’ve experienced so I believe the recovery will be after the presidential election at the earliest.
In California, the steep drop in prices has brought housing costs in line with rents. If you can buy, and have a mortgage payment comparable to rent, it’s a big incentive to make the move toward home ownership.
If you need assistance with any real estate matter, my contact information follows:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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