As economist debate what caused the real estate collapse, homeowners are left with the daunting task of recapturing the equity that was loss over the last six years. A new federal report suggest speculative real estate investors had a larger role than originally thought, that led to record foreclosures and the short sale debacle. Investors who used low-down-payment subprime credit to purchase properties helped inflate home prices and are the main culprits for the recession. Other experts are placing the blame on the lending institutions that so freely gave loans to the credulous homebuyers that were so prevalent during the housing bubble era. The federal government has to take some of the condemnation, due to the heavy-handed tactics they placed on banks and mortgage companies to lower their loan approval standards and promote home ownership.
From a national perspective, 2006 was the peak of the housing market, with an average sales price of $221,900. The average sales price for 2011 had dropped to $176,536. That’s an adjustment of over 20 percent. Some locations like Las Vegas, Sacramento and Detroit had over a 60 percent price drop since the peak. The plummeting prices have caused a shift in the market with cash investors and large down payment buyers making up a large bulk of the home buyers. Foreclosures and short sales made up approximately 30 percent of all home sales, that’s up from about 10 percent in years past.
Nationwide, home prices fell by 4% in 2011, adjusting prices back to 2003 levels. Housing remains the weak link in the economy. High unemployment, larger down payment requirements and tighter credit standards are preventing many buyers from entering the market. The housing market can be divided into four groups. The buyer searching for their first home, those buyers wanting to trade up from a smaller home to a bigger one, the retirement age families that want to downsize, and the fourth group being the investor.
Our local housing market in Davis,California appears fairly stable in 2011, compared to other communities surrounding our college town. The average sales price for the year is $477,079 with 358 properties sold and those homes spent an average 79 days on the market, through December 12th. Home values were almost a carbon copy in the prior two years. In 2009, the average sales price was $485,338 with 351 homes sold. In 2010, the average price fell slightly to $483,932 with 359 sold properties. Davis home sales and prices, remained steady over the last three years. Homes spent an average of 63 days on the market before a sale in 2009, and 65 days in 2010
Back in 2004, when the market was ultra hot, upwards of 600 homes sold with the average price flirting in the low $600’s for a few months in 2005 and 2006. The market was moving fast in those days, in 2005, a home in Davis was on the market for 23 days. We need from three to five years of data to create a cycle. If the next couple of years are similar to the last three years, then we have a level of stability in the Davis housing market. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and easy access to view all local area homes for sale.