As an adjunct to my Perfect Storm Blog post. I went to NAR’s website and looked at the historical sales data, to study the trends as I am constantly asked how long will a recovery take or when will the bottom hit. Those waiting for the bottom will likely miss it as the laggards in every business cycle always do. Sure there is probably some hold out time left, but if mortgage interest rates rise, then the rise in rates will washout perceived gains in timing the bottom.
The issue of mortgage rates is critical as in the Simi Valley Moorpark area, a typical home is well above the FHA preferred rate limits and the increased conforming limits under Fannie and Freddy just require a large down payment.
The volume of sales has been declining, but declining from what?
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The following decades show the volume trends nationally:
| Decade | Low | Average | High |
| 1970s | 1.6 mil | 3 mil | 3.9 mil |
| 1980s | 2.2 mil |
3.3 mil | 4 mil |
| 1990s | 3.1 mil | 3.9 mil | 4.9 mil |
In 2005 the Volume reached an all time high of 7.1 million homes sold
in the united states. 40% of these homes were non-owner occupied compared to a typical year where only 12% of the volume would yield to non-owner purchases. The market was so hot the Fed jacked the interest rates to cool off the speculation.
in the united states. 40% of these homes were non-owner occupied compared to a typical year where only 12% of the volume would yield to non-owner purchases. The market was so hot the Fed jacked the interest rates to cool off the speculation.
NAR is forecasting 4.5- 5 million units to be sold in 2008. Does this mean that the market will continue to decline? Different areas will have opposite reactions, for Simi Valley Moorpark, we will most likely see more of the same until the REO/short sale market begins to lose steam.
Let’s face it, the banks were giving money away and now they are holding on to their money with very restrictive lending requirements. Easy money will no longer drive our market.
Most of the major carnage has happened. Some neighborhoods are poised for continued price adjustments, however good homes that are priced well are selling and selling with multiple offers. If you find the home that you fall in love with and are worried that whether you have the timing just right, let me assure you, if you wait a replacement home that gives you the same feeling, it may not be available if you wait.
Ask yourself the following questions:
Is this the house I love for what I can purchase now?
Size?
Location?
Affordability?
Amenities?
Can I see myself living here for the next 5-10 years?
If your answer is yes to these questions then don’t try to second guess and let’s write your best offer
Tags: buying, fannie mae, fha, freddie mac, guide, home, moorpark, nar, Simi Valley
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