The Case-Shiller Index, an index that tracks average home prices in the US, hit new lows for the housing bust in December of 2011. In the fourth quarter of 2011, prices fell 3.8% to levels that have not been seen since 2002!
This is interesting news, considering the positive news we’ve seen recently.
Some may consider it bad news that prices fell again in the fourth quarter–not us. This is just further proof that the time to buy is now.
Why? Because we are starting to hear positive economic news, such as job growth and growth in the financial markets, while at the same time still seeing some prices fall. This is an interesting dynamic that will push some buyers off the sidelines and back into the market. As more buyers re-enter the market, this will put upward pressure on pricing and prices will slowly start to move up.
The unknown is the distressed inventory the banks are sitting on. We hope the banks will move through this inventory in a controlled manner and not flood the market. This makes the most sense for the banks and is the best outcome for the markets.
The banks benefit because they already wrote down the value of these assets on their books, therefore there is less need for them to move fast and sell cheap. They will be more inclined to move slowly to maximize the value of these assets.
The market benefits because if the banks flooded the market with low priced REO’s or Short Sales, it would literally cause the markets to collapse.
The time is now to start looking for homes. Contact us today at 1-800-287-1808.
Powered by Facebook Comments