Have we Hit Bottom Yet in the Housing Market?

Have we hit bottom yet in the Housing Market? Isn’t that the million dollar question and one that our team gets asked daily!

 

As you can see from the last posting, prices in March across the Bay Area are way down when compared to March of 2007. It looks like we may be nearing the bottom. Why do I say that? For 2 reasons, first inventory levels are beginning to decline. The Altos 10-City Composite Index was down 1.7% for the first quarter of 2008, with most of the decline occurring in March (1.3%). The index tracks homes for sale in 23 metros through real-time listing prices. The largest decline was in San Francisco. The number of days the homes stay on the market also declined. This makes perfect sense…with low prices; homes are going faster and not staying on the market as long. With less homes coming on the market, inventory levels are also going down.

 

The second reason is the increase of liquidity into the market with 360 Billion dollars in fresh capital injected into the market by the feds (Fannie Mae, Freddie Mac and the 12 Federal home loan banks). Investors are now able to sell their mortgage bond holdings and get liquidity back into the market. Basically the feds have “primed the pump”. Once liquidity is back, there are more home loans for buyers and more homes sell as a result.

 

With inventory levels going down substantially each month and more loans available; prices go up. This is all good news for sellers and a great time to buy for buyers. It looks like we are nearing the bottom. The problem is we will only know we were at the bottom when prices go up. This is a risk that many buyers are willing to take.

 

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Alyssa Duggan

Real Estate Broker

 

The Duggan Group Corporation

The Duggan Team

Convenience. Experience. Results.

 

231 Marketplace ste. 344
San Ramon CA 94583

 

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