Is the Market Really Getting Better or Not?
The Northeast Metro Area has been experiencing slight increases in values and overall demand for the last ninety days. In our professional opinion, this false increase* is not a true indication of the actual overall market conditions. After closer review of the market data, you’ll notice that we are already beginning to see declines in market values and demand.
Transactions from November 2009 to January 2010 or later were “in contract and or closed sales” just prior to the ending of the federal tax credit for first and second time buyers. In addition, as of March 31, 2010 the federal government discontinued supporting the secondary mortgage market by no longer participating in the acquisition of CMBS (Commercial Mortgage Backed Securities). Contrary to the expected increase in retail mortgage rates after March 31, 2010, retail mortgage rates have declined over the last 60 days. We feel that this decrease in mortgage rates was the result of 10 Year Treasuries and the overall Bond markets experiencing new in flows of capital from investors exiting foreign/oversea markets.
Estimated Market Forecast for the Northeast Metro Area Real Estate Economy:
- During Q1-2 of 2010, the Northeast has been experiencing pricing declines between 0 to -.25 per month. Looking forward to Q3-4, we actually anticipate increased downward pressure of between -.25% and -.50 % per month.
- Median priced properties will typically experience less severe declines in demand as well as over all pricing. In contrast, we do anticipate more dramatic declines in the high-end luxury markets as there is obviously less demand and or liquidity for buyers in this market sector.
- We are calling for market stabilization between Q4 of 2010 and Q1 2011 without a return to normal/traditional market appreciate of 3-5% per year until sometime between Q4 2012 and Q1 2013.
Look out for more of Shallis “On the Street Translations” in the coming weeks and as news breaks.
Does your Realtor truly know what’s going on in the ever changing real estate market? Professional knowledge and experience is what you need. Call Sean T. Shallis immediately at 1-800-295-5995 x.911 or contact us on our website to work with the “Market Makers” and get the deal you deserve!