Bleak. Devastating. Disastrous. Heartbreaking. These are only some terms bandied about when surveying the national scene of houses for sale. Some folks look at the classified ads in the newspapers and cry, some cringe-others drool. If you fled the North East selling your house in say, Syracuse for some $150k, dipped into your nest egg or 401k for $100,000 more to plunk down on a spread in Fort Myers, Fl-the Sun Coast, there is good news and bad news. The good news is that if you took it from your 401k (laughingly referred to these days as your 201k) that portion of your account was saved from a stock market battering. The bad news is your Florida home has taken a worse beating and is now worth less than $100k (according to the National Board of Realtors Median Home Prices.) In fact you could not sell it-if you could find a buyer– and move back to Syracuse! But you could probably trade, even-up, for a home in– Rock Is. Illinois, Detroit or Toledo, OH last time the classifieds were checked. Let’s say you sold your home in Miami/Ft. Lauderdale, Fl in 2007 to buy a house for the same $350,000 in a drier, exciting locale like Las Vegas. Forget about moving back unless you shell out about $75000 to do so-even taking into account the dramatic decline in Florida, your loss in Las Vegas is much worse. But, if you could find a buyer, you could move to Green Bay, Wisconsin or Des Moines, Iowa pretty much even-steven for your 140K Las Vegas proceeds. Talk about change of scenery!
Naturally if you are a buyer in these times generally speaking you should be in heaven as houses for sale around the nation are anywhere from 30% to 60% lower than the median price in 2007. And mortgage rates are at an all time low to boot. Just be sure to look at fixed rate mortgages as adjustable’s are sure to rise as inflation is bound to occur and interest rates will rise to stymie this event house for sale in burnley. Location, as always, will dictate price. Some in-demand, metropolitan areas such as Boston saw declines in the 25% range; but even Honolulu did not go unscathed with median prices declining a mere 10% to approximately $600000. The houses for sale in locations anchored by universities such as Austin, TX (Univ. of Texas) did not decline at all from 2007 (median $183K.) And the low priced areas of the Mid-West (under $100K) didn’t have much further to depreciate.
An oddity should be noted about Las Vegas. Even though houses have been abandoned and tens of thousands are in foreclosure, some 50,000 new homes are being built or on the drawing board. Crazy! Apparently buyers don’t want to live in “ghost” neighborhoods. But that inventory overhang of already built dwellings or houses in foreclosure will have to be worked off before purchasers of the new homes will ever see appreciation. Nationwide forecasts are for further declines in price for houses for sale. As a prospective purchaser I would advise you keep abreast of the classified ads to gauge buying opportunities. Focus on houses for sale by the owner or the bank for greater savings. Even so, you might want to rent and wait until the dust settles before you buy a house. Because the “new normal” in appreciation may only be about 2% per year, there is no reason to rush. And beware if congress takes away the tax deduction for mortgage interest and/or local property taxes. There will be another dip in price on houses for sale.