Is The Home Mortgage Market Stabilizing? Experts Are Equivocal
According to official reports, home prices have continued to decline during the third quarter of this year
. But many real estate agents in the Southern California area maintain that they have seen many signs of stabilization.
On Tuesday, the National Association of Realtors reported that home prices in major metropolitan areas declined almost fourteen percent when compared to the same time last year. However, prices were up in the first part of the year, which suggests that the oscillations may even out.
An agent with J.T. Kirkland predicts that mortgage rates and the federal homebuyer's tax credit will help to pull in new buyers into the market, keeping prices at least stable, if not rising, into the spring. "It's different town to town, city to city," he says. "Areas with good schools are seeing increases, for example, and demand is rising again."
He confirms that, on paper, prices at the high and low ends of range have indeed dropped, but that the middle prices have remained fairly stable, which means that most buyers and sellers will have more luck than they suspect. However, the markets flooded with foreclosed and shortsale properties, which create a downward pressure on prices. Real estate short sales have been very helpful in some areas, but when they become to common they tend to exacerbate the problems.
But the tax credit is doing its job- incentivizing first-time buyers to get into the market and snap up those foreclosures and short sale homes. And though overall prices are down, the actual number of sales is increasing thanks to the credit. Sales of single-family homes and condominiums actually rose more than eight percent this quarter, though they haven't reached anywhere near the peaks of 2004-2005. Mortgage-short-saleServicing
The main problem, say experts, is psychological. People feel frightened, insecure in the their jobs and wary of getting trapped into a payment deal they can't handle. The key to overcoming these doubts is open communication with lending institutions, buying affordable homes that fit one's income, and ignoring the melodramatic reporting on the housing market on TV. Television news exaggerates in order to get more viewers- obtaining news from free outlets can often be more reliable. The only thing to fear is fear itself.
Another thing for potential buyers to keep in mind is that they will never get an opportunity like this gain- home prices will soon begin rising again. It's smart to get into the market while everything is cheap.
by: Randy Scott
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