All the media is reporting the Case-Shiller Index shows the November, 2010 home prices dropped 1% in 20 major cities. But–oops, buried under the headlines, California’s prices went UP! This is another expample of the media trying to scare people with headlines that may be a bit misleading. The reality is that prices are stabilizing and buyers are feeling more comfortable about jumping into the market again. That is the real story. Below is an excerpt from my recent newsletter, in which I discuss Park City mean prices and trends. If you want to read the entire article, send me an email…
10-Year MLS Trends
Although we sold more property in 2010 than in the past two years, we still have a lot of ground to make up before we see the same demand as the boom years. The dollar volume has increased over the last two years because even though prices have decreased, they have not returned to pre-2004 levels. The median home price in 2010 was $399,000, which is higher than 2004 and each prior year. The average price of a single family home as stabilized over the last 6 months.
What Does It Mean?
Prices have fallen and interest rates are still at historic lows making homes making home ownership more affordable today than at any other time in the past 15 years. Under “normal” circumstances this would cause demand to increase and prices to rise. However, the pool of available buyers has shrunk from the peak years because many self-employed people now find it difficult or impossible to obtain financing, some folks who got into trouble speculating on real estate ruined their credit and will not qualify for financing for years to come, and other people have been scared away from buying real estate. My prediction is that prices will remain relatively stable but will not rise until it is easier for people to obtain financing. This creates a great opportunity for buyers and investors who are willing and able to take advantage of today’s affordable prices and excellent terms. Even if you don’t have perfect credit or 20% down payment, many sellers are willing to offer creative financing terms to get their homes sold. There are great opportunities for buyers who want to establish a foothold in the Park City market. I am currently working with several buyers who are paying 2004 prices and 2011 interest rates for furnished Park City townhomes. Do you know anyone else who is interested?