Hello this is Diane Cardano from Cardano Real Estate Experts here with the “Hot Off the Press” Real Estate Market Report through September 1st. In today’s video blog, I review the BIG news right now. The 2 issues are “What is happening with house prices?” and ”Are we heading for a new balloon?”
The good news is the latest home price expectation survey
came out a couple weeks ago. This is a nationwide survey of over 100
economists, real estate experts and investment & Market strategists. First
they looked at the pre-bubble number, then there was a correction or recovery
from 2011 to the present.
Now let’s look at what the appreciation of house prices
should have been if we had stayed on the same trend line before the
roller coaster ride. In the next 5 years we would be at around 22.3%. And if you look at the actual, and
projections through 2017, it comes out to be around the same appreciation,
22.3%. Just a year ago, these same economists were not as positive as they are
now! Watch the video with complete slides showing graphs and illustrations.
Distressed property numbers are diving, foreclosures are
down, and the foreclosure inventory is down as well as the number of delinquent
loans.
There is NOT a housing bubble forming right now. There are 8 cities in the country that
currently have appreciated over 20% since the bottom hit. However with those
appreciation numbers, both Las Vegas and Arizona are still down 50 and 40%
respectively. When these numbers start really approaching 2006 numbers, then we
can talk about a bubble, maybe.
As the mortgage rates increase so
does the monthly payment for that same home. Some people will reduce their
asking price for a house so they can afford it; these are people shopping by
budget. Some people will be eliminated from the market altogether because they
will no longer qualify for a house that they are looking to buy.
I do believe that the price appreciation momentum will slow
down due to the increase in mortgage rates,
but nothing like the newspapers, radio
and television are saying....
Over the last 30 years, the 4 times that the interest rates
spiked, prices did not go down, they went up. You may have been hearing that
with interest rates going up, prices have to tumble, but not necessarily and
not historically. It is not just the interest rates that determine price. It is
the amount of supply, the inventory, where the economy is and where
unemployment is. There is no guarantee that because interest rates are spiking
up that prices are going to spike downward.
Mortgage Rate projections for 3rd quarter 2014 are between
4.8% and 5.1%. However, for those of us looking at the past numbers, as we can
see the mortgage payment for a $250,000 home has come down over the last 30
years.
Some other interesting stats from Trulia shows that the
number of buyers out of 100 willing to bid over asking price. These studies
show that 25% of the buyers willing to pay 1 to 5% over asking price, 9 out of
100 are willing to pay between 6 and 10% over asking price and 4 out of 100 are
even willing to pay 10% more than asking price!
This is something I am very familiar with as over half of my
listings have sold this year for more than asking in 3 days due to our high
tech marketing and our determination to crush the competition when it comes to
selling our client’s homes.
John Paulson says:
“The housing market has bottomed. It is not too late to get
involved. I still think buying a home is the best investment any individual can
make. Affordability is still at an all time high. Buy a home and if you can, buy
a second home.”
Thanks for checking out my market update for September.
Check back next month to our blog. If you are planning to sell your home, be
our guest at our next home seller seminar on September 26th at the Abington
Library. Sign up at this link. www.HomeSharkSeminar.com
