I was at a seminar yesterday in Philadelphia where many of the agents were from the Main Line, Bucks, Chester, Delaware and Montgomery Counties as well as some from New Jersey where the speaker asked everyone present who knew someone who was behind on their mortgage payments to raise their hands. Wow! The whole room had their hands up. Seriously, I am not kidding, this roomfull of Realtors all knew someone who was behind on their mortgage payments. Last week I was talking with another realtor who knew several friends across the country who had not paid their mortgages for a year and yet had not been foreclosed on yet.
Earlier this week I listened to Austin Jaffe, economist for the Pennsylvania Association of Realtors give a presentation on the market ahead. He also commented on the shadow inventory out there, homes the banks have not foreclosed on where homeowners are behind on their mortgages and that this is going to impact the market in the next year or so causing prices to drop a further 10-15% possibly according to many economists. RealtyTrac reports that 1 in 45 homes are in foreclosure. If this is reality and there are even more homes behind on their payments what lies ahead. As can be seen from the Case Shiller graph prices have dropped, supposedly $5 trillion has been removed from the housing market. Whilst this is not good news it is reality.
The governement has indicated they will stop buying mortgage backed securities at the end of March, leading to rising mortgage interest rates. So if you are considering selling, now is the time to sell, get you home on the market, use a realtor to market it, qualify the buyers and get it sold as soon as you can before higher interest rates cause prices to dip further than they have.
If you seriously can wait three or even four years you may see prices begin to recover, but it will be longer before they return to the prices of the last few years but if you have time....otherwise act now and be realistic, be agressive, get ahead of the curve, don't chase your market down always following but always too late, price it right from the beginning and you will see your home sold.
Thank you for the information. That chart is certainly not pretty, but it is reality. ~Doug