Timing is everything in a market...whether that be stocks or real estate.
On Thursday, the U.S. Commerce Department said June single-family homes sales fell 6.6 percent from May, as the median sales price dropped 1.3 percent.
We sold our home a couple of months ago and although the housing market in that area of the country is strong due to Ft. Drum, one has to wonder if the recent downturn in the market has effected the areas of the country where housing was a sellers market.
First there was a shakeup....lenders in sub prime loans were facing more and more foreclosures. This happend because generally speaking, people were looking to buy more house than they could afford and getting into variable APR mortgages to do it. As interest rates started to climb, so did the interest rated on those mortgages.
If a home buyer took out a mortgage for the most the bank would lend with little or no downpayment then that buyer is probably looking at a crisis if he isn't in one already. Certainly the monthly payment of a 250k loan at 5 % variable rate is much less the 6.5% fixed for the same amount. So when that introductory rate of 5% climbs to 6, 6.5% the house of cards can come falling down.
This makes the overall real estate market a buyers market, for now.
That house I sold for $99,900 just a couple months ago may actually be worth less and the buyer who financed 100%, well it will be some time before he has any equity.
1 comment:
This is true. I have seen friends of mine even go through that same event are lucky they were able to refinance; even if it was at a higher interest rate.
Me and hubby were lucky though. We purchased our first home after years of rebuilding credit from previous marriages. We have 20% down and were able to get locked in at 6% over 30 years. At the time I thought that was a little high, but not so much anymore!
Glad you were able to sell your house with how crappy the market's been.
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