The housing economy has suffered since 2007, knocking home values down nearly 20% nationwide. Here in Sacramento, the hit has been much larger (30% to 50%). And while some areas have fared better as compared to others, in general, home values are down.
The median home value in Sacramento in the 3rd quarter of 2007 was $337,000 when rates were in the low 6 percent range. Compare that to $183,000 per 2011 3rd quarter numbers (latest statistics) from National Association of Home Builders. Match that with interest rates in the 4 percent range and we have a recipe for success.
Mortgage rates are down, and that’s good news for buyers in Sacramento. The combination of low rates and low prices has led home affordability to an all-time high. As you’ll hear in this 4-minute interview with NBC’s The Today Show, carrying a mortgage costs 25% less per month as compared to just 3 years ago.
Some other notes from the interview include :
- There are more buyers out looking for homes today, which leads to more sales
- The housing market is expected to get gradually better, month-by-month, in 2012
- Foreclosures will continue to be a big part of the housing market
With housing supplies shrinking, buyers throughout Northern California may find their best “deals” today — before the Spring Buying Season begins in February. Also, take note of my blog a few days ago about higher loan fees coming soon, due to the payroll tax cut extension.
However, we can’t forget that housing markets are local — not national. Each town and neighborhood has its own market drivers and prices where you live may have already started to climb.
For accurate, up-to-date data on the housing market, talk with a local real estate agent. Better yet, ask me to introduce you to a very good agent – a truly great agent is not always easy to find!