The housing market.
The biggest fear in Real Estate is that the ‘bubble will burst’ and property values will decrease. In many regions they have started to see a slight decrease in the property values. There are many reasons and factors into the decreasing of property values.
First, many regions saw a very dramatic increase in property values over the past 3-5 years. Some areas were appreciating over 10% per year. So giving back a small percentage isn’t a huge problem. The problem lies with buyers than bought in the peak time using either 100% financing or an ARM (adjustable rate mortgage). These consumers now have the difficult task of refinancing into a fixed with possibly a lower home value. In most cases these borrowers will have to bring cash to close the new loan.
Another reason is over-supply of homes and new construction. Many properties are going on the market and are staying there a long time. Added to that are all the new neighborhoods being built. With so much supply and little demand prices have dropped forcing overall values to lower.
If you are a buyer now is a great time to really take advantage of the low prices. If you are a new home owner chances are you might have to ride out the current market.
Tell us your take on the market in your area. Are homes selling? Do you have a great deal of construction going up in your region?
