Are We Seeing the Bottom of the Real Estate Market?

The inventory of unsold homes has come down. According to the National Association of Realtors, there were about 3.8 million unsold homes on the market at the end of June. That' is a lot less than the 4.5 million a year ago.

Housing affordability is dramatically better. People, obviously, need to live somewhere. At some point, housing gets cheap enough that the fundamentals start to look good. Compared to the peak three years ago the average home price is about a third cheaper. In some areas that number is even 50%; cities like Las Vegas, Phoenix and Miami have been hit hard.

Mortgage rates are still at an all time low which makes purchasing a home even more affordable; thirty year rates for instance are around 5.5%. Real estate is showing signs of recovering; it is a positive sign that we have finally seen prices reaching the bottom in many markets but we have to remain cautious for several reasons:

• The spring/summer period is always a strong real estate season; interesting to see what will happen in the third and fourth quarter.
• Low interest rates might rise in the near future.
• $8,000 refundable tax credit for first time homebuyers; uncertain if this will continue in the near future.
• It is still expected that more foreclosures and distressed sales may be coming, especially in California.

Bottom-line; we see positive signs after the real estate industry crashed just a few years ago but we have to be cautious and realistic.

I am positive about the future but I keep telling my clients, especially sellers, that it will take many years before home values will get back to the same level where it was a couple years ago.

The buyer is still in the driver's seat! 

Our FREE In-Depth Real Estate Market Reports updated weekly, break data down by zip code and price point. These are the best "real time" sources of data you can get for your local market.

Contact Craig for more information on relocating to Danville or the I-680 Corridor – 925-984-4910