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Housing Prices Still Too High? Rightly Taking a Swipe at NAR

If you are a regular reader of this blog, you’ll know that I’m not a big fan of hyping the real estate market back into recovery. The banking industry, unemployment and the economy in general, still will have a large impact on home values over the next 3 to 5 years. It is not popular in my industry to not hype the advantages of home ownership. I am excited about the super low interest rates and the ability to get loans very close to the 4% range these days, a word of caution always needs to be included in the discussion. My word of caution is if you buy home today, plan on staying for a while before you see a significant increase in the value of that property.

Barry Ritholz, the author of The Big Picture Blog, as seen in this interview below on Yahoo Finance Tech Ticker. If it seems that Barry is taking a swipe at NAR, well maybe NAR deserves it, as I never seem to see any news come from NAR that isn’t always rosy.

Tough markets, down markets and depressed markets should not be scary or seen as a negative. It should be seen as an opportunity. Taking opportunity in these markets can be very rewarding if approached with proper research and patience.

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Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty

Ted Mackel is a top producer at Keller Williams Realty Simi Valley,

specializing in Simi Valley Real Estate

(805) 432-7705

Simi Valley Home Buying Guide for 2008

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?

NAR Stats Chart >

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.

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