This is article from Reuters dated January 26th 2008.
NAR (National Association of Realtors) has annouced that, in December 2008:
- Existing home sales transaction has increased by 6.5% ---- annualized basis, it is 475,000 transaction, unexpectedly high transaction.
- Median sales price has done done by 15.3% compared to December 2007 --- the largest decline since 1968.
- Inventory has gone done by 11.7% or 368,000 units, equivalent of 9.3 month worth of inventory).
- 30 Year Fixed Amortization mortgage has declined to 5.12% in Dec 2008, the lowest rate for a few decades.
I tend to agree that, in some locations, real estate price must have bottomed. It is also very interesting to note that, the deeper the price decline, more active the transactions. Below is the data from DataQuick regarding Dec 2008 transactions in major counties in California. I can say that bottom is very near in metro like San Bernardio where price have declined by 42% but transaction has gone up by 88% --- and median price has done down to $180,000.
|County||Sales Volume||Median Price|
My personal point of view on "bottom on US rea etate value" is yet to come. As I wrote my previous blog posting below, 1) bottoming schedule depends on the Metro area and 2) it takes until end of 2010 for some market to hit the bottom.
My rationale is that 1) foreclosure continuously increasing -- this is future sales inventory and 2) US economy continue to decline with pay cuts and higher unemployment.
However, in the metropolitan area like Austin Tx where there are little risk of price decline, we have great opportunity to purchase property at discount from distressed seller. In addition, in the rapidly-declining-market like Las Vegas, Phoenix or Riverside/San Bernardino, toward the end of 2009, we will have tremendous buying opportunity at the bottm of the market with good cash flow.
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