The question is; why are prices down today, when several other measures of today's economy show it as very healthy; even much healthier than in the 1930's?
Nigel Gault, an economist with the forecasting firm Global Insight states that the current situation is not blamed so much on interest rates, rather that housing prices in general became especially high throughout a very long period without a downturn.
All the bleak news tends to overshadow several key factors that are actually good news for home buyers. Most home owners are still above water financially, with a good cushion of equity in their homes, possible even a paid-off mortgage. These factors outweigh the current drop in housing prices.
Current performance of housing prices varies greatly by region. Karl Case, a housing expert with Wellesley College in Massachusetts states that in more than 40 states, housing prices are not that far out of line, because they have followed the growth of personal incomes.
The market should be more stable by the time most owners have to sell their homes.
With regards to the potential home buyer, the current housing shakeout promises to make housing more affordable in some over-inflated markets across the country.
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