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This Month in Real Estate

December 12, 2008

I know there’s been a lot of chatter about real estate, the financial industry “bail out” and what the future of homeownership might look like. I thought I’d share a few key statistics that have been pulled together by the Keller Research Center at Baylor University in Texas.

  • Mortgage rates averaged around 6.1% for the month of November. After the Fed announced that it planned to buy as much as $600 billion in mortgage debt, weekly rates fell from 5.97% to 5.53% for the week ending December 3rd, the largest weekly decline in 27 years.
  • While U.S. home sales remain sluggish due to tight access to credit, increasing job losses and overall economic uncertainty, historically low interest rates and decreasing home prices continue to contribute to positive affordability conditions. According to Global Insight, home prices are now 3.8% undervalued based on total market value. Thus, in spite of great uncertainty, the brighter side of the picture tells us that qualified buyers have a great opportunity to find value at affordable prices.
  • The pace of home sales fell 1.6% from October last year. Distressed sales represented about 45% of all sales. Despite the overall drop, sales rose in Boston, Minneapolis, Denver and many Florida and California markets. 
  • Home Prices declined 11% from last year to $183,300, the largest decline on record. The downward pressure in home prices reflects the large numbers of distress sales and foreclosures.

Why do I share this? Because for some folks, this might be the perfect storm of the right time to invest in real estate. The stats shared above are national level statistics but the trending is very similar in the greater Madison area. For more in depth analysis of the local market, don’t hesitate to contact me. I’m happy to pull down the statistics for a specific geographic area or price point/style of housing.

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