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Housing Prices, Affordability, And Other Things You Need To Know
In 2008 the median family income was $63,366, interest rates were 6.15%, the median home price was $196,600 and the Monthly P and I on that house was $958. Today the median family income is slightly lower at $61,544, but the median price house has dropped to $165,600 with a median interest rate of 4.51% makes the Monthly P and I on that house an affordable $672! (see National Association of Realtors Chart below).
Ummm.. So what? Bottom line is that housing is much more affordable today than three years ago. This is causing downward pressure on inventory. Add to this that the pipe line is not being filled with new foreclosures as fast as it was even two years ago and you will see price appreciation.
NAR HOUSING AFFORDABILITY INDEX Interest rates are at an all time low and the availability of money to QUALIFIED borrowers is relatively plentiful. You can see from the chart below that interest rates on 30 year conventional financed loans have dropped to an average of 4.36% with fees associated with those loans at less than one point.
INTEREST RATE AND PRICE SUMMARIES I generally don't like to talk about national price trends, but the below chart regarding price appreciation is helpful in looking at the trends on appreciation and I believe that South Florida is ahead of this curve. Our markets are above the line at the lower end and probably on par at the higher price points. I have included a Housing Price Index Chart as well but keep in mind this is about TRANSACTION PRICES in other words on houses that are sold. The prices tend to have downward pressure because mostly the lower prices homes are sold not the higher end. This has a tendency to skew the numbers. I included three metro areas for you to review Naples/Marco Island, Cape Coral/Fort Myers, and Tampa, St. Pete, Clearwater all areas where Market America Realty has market presence.
FOUR QUARTER APPRECIATION THROUGHOUT THE U.S.
HOUSING PRICE INDEX SUMMARY Ok, enough on data. What are we seeing? We are certainly seeing a reduction in inventory of available homes locally. We have more buyer leads now, measured on a monthly basis, since we have been tracking them. The sales offices are packed, but tastes have changed towards cost effective, smaller homes. Buyers are taking their time. They are not concerned with rapid price increases or a quick rise in interest rates. For the right home that meets their needs, buyers are paying at ask or above, after all an increase in $20,000 does not translate in much more of a monthly payment and the general feeling is that the prices are a bargain (and they are!)
I see the next 24 to 36 months will return us to a balance of replacement cost to selling prices and therefore a return to building new. Even now companies like Lennar are beginning to build again. I do not see a return to high rise condo building so buyers of these should do well over the next five to seven years on price appreciation.
Politically I am concerned about the rising debt and its effect on inflation, but as a real estate investor I see the upward pressure on prices will be positive. I want to own things, not cash.
The end of year brings with it the planning and predictions for the new year.
Author Resource:-
Please visit our website to view updated Florida real estate listings.
In my role as a broker I run what I would call a "boutique" real estate agency and I run my new franchise, Engel and Voelkers Fort Myers River District - high end residential homes. I am a motivator, a canceler of energy, and sometimes coach.
While you purchase a home, you'll probably be making most significant purchases in your lifetime. Because buy a home is such a significant financial endeavor, you will have to keep in mind essential factors that go into shopping for a new home.
For most of us, buying a home is our biggest life investment. As a result of a new house being such a major purchase, you will have to consider all the important fundamentals about what is a must to do to buy a mortgage and get the appropriate mortgage you can afford.
Bottom line is that housing is much more affordable today than three years ago. This is causing downward pressure on inventory. Add to this that the pipe line is not being filled with new foreclosures as fast as it was even two years ago and you will see price appreciation.
It's not an easy decision to make as to whether you lease or purchase your business premises. Your company buildings such as offices, factories and warehouses may be your most expensive business venture, but they can also turn up to be the largest business investment too. It is therefore advisable to take some time to think over this huge decision.
My potential buyer was looking at the home with an eye to renovating it. She told me she would be buying this home without any financing. I almost said to her, "I can't not get you financing, you will have to buy it without something else." But I just smiled and told her that I felt sure this house would go quickly for cash. (most of our REO inventory sells for cash).
For the past three months Gail and I have been looking for a home to buy. Every few days I would check out new listings in the area we chose. We toured a few homes a week. We made an offer on a home on Wednesday. The offer was accepted. We still need to qualify for the mortgage and complete our home inspection, but I foresee no obstacles t a successful close
Here are the reasons we bought now...
During the current market environment, numerous people are looking for ways to save cash, and one avenue that is becoming very effective, is to benefit from refinancing mortgage. Home loan refinancing is basically exchanging an active loan deal and its connected interest rates with another mortgage.
Mortgages facilitate Canadians to pay for homes, lower the rate of interest on homes they previously have, and tap otherwise untouched house equity and exploit it for home improvements. Devoid of the favorable influences of mortgage loans, it would have been compulsory to buy that home with money. Home mortgages are a lot more than mere property loans.
Home mortgages are a lot more than basic property loans. With the help of refinancing, you will be able to benefit from better rate of interest, longer or shorter pay off time, or save for old age! With the help of a home equity line of credit, you can consider that spare funds for those unpredicted emergencies which come about.
The number of houses in foreclosure has escalated to more than 13 million houses across the nation. While no homeowner wants to have their property foreclosed upon by the bank, many have no other option. Mortgagors that want to avoid foreclosure have to be very proactive the second they cannot afford their loan installment.
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