Home Prices Are Down: How Could That Be A Good Thing?Ed Craine
November 24, 2008 — 1,098 views
This week the National Association of REALTORS® (NAR) issued a report which indicated that median home prices are down nationally 9% from the same time last year. While that doesn't sound like particularly good news for homeowners; in California, it may be an indicator that we're nearing the end of price declines, as buyers are re-entering the home purchasing market.
Let me explain. Because home sales are rising so rapidly in the hardest hit areas of California, and because in many cases homes for sale in California are beginning to see multiple bidders for properties, NAR's Chief Economist Lawrence Yun stated that this "suggests that future price declines may be minimal." Hot diggity! Hope he's right.
Although the financial crisis has now spread far beyond the housing bubble, there's little doubt that the economy can't make a full recovery until the surplus of inventory (homes currently for sale) levels off. So, although I'm not thrilled that most homes have lost value, I see the increasing number of home sales as a step in the right direction toward recovery.
As always, please feel free to email me at [email protected] or call me directly at 415-406-2330 if you have any questions, on this or any other real estate or mortgage related questions.
Ed Craine is the CEO of award winning Smith Craine Finance, one of the oldest independent Mortgage Companies in San Francisco, California. A 25+ year veteran of the real estate financing industry, Ed has originated and negotiated loans in excess of $2 billion, to include both commercial and residential properties. He has simultaneously held such notable positions as Vice President of the California Association of Mortgage Brokers (CAMB), as well as serving as the Public Relations Committee Chairperson of the 5,000 member strong association during 2007, the year in which the mortgage industry received more media attention than in recent history. Ed currently also serves as 1st Regional Vice President of the Certified Commercial Investment Member Institute (CCIM). He will be inducted as Vice President of the Southwest Region of CCIM in September 2008.