Market Survey by Broker/Owner Harry L. Cross, III:
We have seen an increase in buyers in the market over the past few weeks and have made a number of contracts, but I am not feeling confident that we have made any real turn around. As I continue to investigate and study where I think we are headed, I must tell you that we are probably in this market for at least two more years. It is always best to make decisions from an informed position, so here is what I have summarized from what I have read and experience:
1. We have had a value shift downward by 15-25% for almost all properties since this all started.
2 . Values will most likely continue to fall as long as the foreclosures continue to be 25-35% of our total market, as they are today.
3. Interest rates will increase for long term mortgages to around 6% or higher.
The Government programs to help home owners to stay in their homes have not been successful for a lot of reasons. The solution is “short sale agreements” where the bank and owner come to an agreement and the home owner is released from any future obligation because of the short sale. This process saves the bank a lot of expenses inherent in a foreclosure and allows the seller to get back in the market in 2-3 years to buy again.
The big change coming is that the Government is backing or buying up almost 90% of all mortgages in today’s market. The Government has become the mortgage market. The Government plans to cut back on this policy soon and as the banks and lending institutions start to make more loans, then it is predicted that the rate will go up about one percent to 6% in the open market. This is all very complicated, but the bottom line seems to be, it is the best time to buy and sell, because the interest rate is headed up, which will affect prices and demand.
4 comments:
Linda is in real estate, she gets it. However she choses to ignore what the industry is going through. Afer all Suffolk only follows they never lead what the REAL municipalities on the Southside do. She'll point her finger at the City Assessor's Office shrug her shoulders say 4% is what they calculated then turn and laugh behind our backs. And you thought the School Board was bad?
In a simple and few words, No she does not get it! She has worked hard, but only for herself and with the help of those who support her not the rest of us.
Vote out all incumbents!
Great piece by Harry to spell it out. The Assessor's Office needs to be held accountable for misrepresenting property values. Simply stated, the Assessor is lying to the public and has inflated property prices without any data to justify the assessments mailed out last week. the Assessor is a dishonest person and I think if he has any morales he will step down and refuse to be part of this farce. Common on Mr Assessor, step up to the plate and either provide the data to the public or show some honor and resign!
Lets look at the larger picture. Interest rates are on the way up later this year, federal borrowing is at an all time high and government entitlements are increasing. There is a huge inventory of foreclosed, new and existing homes on the market that will pressure home prices downward in a prolonged economic recession. We therefore must anticipate the bear housing market will be with us much longer than two years. Consequently assessments will continue to spiral downward much more than what the municipalities have published or are willing to sustain without boosting the mill-rate. The citizens deserve an explanation how 4% was calculated before the bottom drops out of the market.
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