In working with various clients looking into purchasing a home, some fear that home prices will drastically drop by year's end at a whopping rate of 20%!! They fear "overpaying" for a home if they buy now. Therefore, to put these clients at ease and to share the knowledge that we have come across, we wanted to address this fear by giving you data and statistics. According to DataQuick Information System, it is true that home sales have slowed to its most drastic sales rate in 14 years. This means that homes are not flying off the shelves and there is an abundant amount of inventory available in comparison to home sale numbers of 2006. This already translates to being beneficial for buyers because there is a wide selection of homes to choose from. Feel free to shop around!Now, based on the survey by DataQuick Information Systems, the median price paid for a Southland home was $502,000 in June of 2007. Okay, here's the exciting part!! Although the number of homes being sold had lessoned, the PRICES of homes actually ROSE!! In comparison to June 2006, the median Southland home price was $490,000. So in 2007, home prices were actually up 2.4% in comparison to the exact same month last year. Additionally, the typical monthly mortgage payment that Southland home-buyers paid in June of 2007 was $2,430 in comparison to $2,364 in May of 2007 and $2,422 in June of 2006. Buyers are actually willing to pay MORE now than they did the month before and even the same time a year ago.
With this in mind, we can conclude that although Southern California home sales have declined drastically, home prices are still stable or increasing in certain markets. As a buyer, if you are looking to purchase a home to live in, now is a good time to buy because home prices will most likely not be dropping as drastically as some may assume. According to the data above, home prices are actually increasing. It is now a good time to purchase because interest rates are still low, home prices are still affordable and not unreasonable, and in the long run, while you are living in your dream home, you will be accumulating wealth.
On the other hand, this is Southern California and even if home prices did have a slight decline by the end of 2007, historically speaking, it eventually surpasses prices of the previous years. As you can see by the chart above published by DataQuick Information Systems, home prices have generally increased since 1988. So, as long as you are purchasing a home for yourself and your family to live in, it wouldn't matter if your home price decreased by the end of the year because you're not going to be selling it - you'll be living in it. Buy your home now, live in it and enjoy it, sell later when you are ready to upgrade, and make some money while you're at it! Oh yea! Please don't forget to contact us (www.minhandchristie.com) so we can represent you as you laugh all the way to the bank ;)
