A recent CNN article menitonied 3 reasons why home prices will slide in 2010.
- More Forecloures coming to the market
- Higher Interest Rates
- Expiration of the tax credit (April 30th)
Dave’s take:
First of all I hope let me say that I hope i’m am right. I sure don’t want my personal home to keep declining in value.
Real Estate is local local local. Working in a high foreclosure area in Stockton, Ca, I agree with the articles first point to a slight degree. Here in Stockton we are getting multiple offers on these foreclosed homes. I’m talking 5-15 offers! Our inventory is down to 1.4 months. A normal market is 6.5 months. An increase in supply o
f homes in our market will not hurt our prices to much. It will bring it back to a more normal supply and demand.
Rates will affect prices. Higher rates=less qualified buyers. Less buyers =more homes on the market= price drops.
The Tax Credit: Many people I speak to are buying because of the affordability of today’s home prices. Most could not have bought 3-4 years ago. The Tax credit is just a bonus for buying now! Come summer when prices are still low they are not going to stop buying because the tax credit went away. They are buying because they can own a home for less than what it would cost to rent.
David McKeever with http://mckeeverrealestate.com Stockton Ca
