If you’re wondering where the housing downturn is headed in Belmont you can get a good indication by these two snap shots taken for the month of March 2007 and 2009.
We use 2007 as a benchmark since it was the last year where the impact of the housing crises had not yet been realized in our market.
Here are some startling yet revealing statistics:
The far right column of this chart says it all. Every indicator in red illustrates a deterioration of the seller’s market which has prevailed for so long.
You may notice that even though larger homes sold in 2009 the median price still dropped $161,500 in 2009. Adjusting for this, the real median price drop is actually $252,850 or 26%.
Today, on average it will take almost three times as long to sell a home in Belmont; when you do sell you are likely to receive under you asking price. In fact statistically you no longer have any chance of getting over your asking price and the odds of getting less than your asking price has increased by 50%. Sellers now receive on average only 96% of what they ask for their home compared to over 103% in 2007. In real dollars that translates into a swing of $52,000.
In the end, this much anticipated market correction will produce a more stable real estate market. Affordability is increasing and eventually sales will increase as buyers feel more optimistic about the future, including job security and housing stability.
Considering the drop in value we are experiencing, for sellers who are debating a moving out of the area, sooner rather than later will probably produce a better result. In all likelihood it will be many years before inflation drives price points back to levels seen in 2007.
A down market is typically an attractive time for sellers who are thinking of a move up. The logic behind this is a more expensive home is less in real dollars–and also saves you thousands of dollars in property taxes over the life of your ownership. Our current market also includes attractive Interest rates that are at historic lows, though Jumbo loans are not enjoying the full benefit of the government’s intervention.
Buyers who have stable jobs and are planning to live in their first home for five years or more are benefitting the most from the current conditions. Prices are at a low not seen in years, interest rates are at historic lows, the government is paying them $8,000 to buy a home this year, multiple offers are for the most part non-existent and the high inventory levels means there are a lot of homes to choose from.
In every market, there are opportunities. If you would like advice on how to make the most of our current economic climate give us a call at (650) 508-1441.
*Data retreived from the MLS
The information contained in this post is educational and intended for informational purposes only. It does not constitute legal or tax advice, nor does it substitute for legal or tax advice.