20% – 30% Off
With median home prices off 20% to 30% from the high hit in August of 2005, there is a meaningful buying opportunity, especially for first time buyers and investors. It was only a couple of years ago when detached single family homes priced under $500,000 were becoming a thing of the past in many Sonoma County communities. The graph nearby illustrates the change in the Sonoma County median home price since the beginning of 2005 through February this year.
As of this writing there are currently 586 active listing of single family homes in Santa Rosa with asking prices below $500,000. Of those 387 are priced under $400,000, and 120 are priced below $300,000. This strikes me as a rare opportunity for those who want to buy their first home, and who previously felt they had been priced out of Sonoma County.
The story is different for trade up buyers since they have to sell into a lower market, but even for them there are benefits. What may have been lost on the sale side is gained on the buy side, so a trade up can still be accomplished for those wishing to make a change.
The turmoil in the mortgage markets continues and shows no sign of improving in the near future. My initial expectations were we would see noticeable signs of improvement once the initial shock of the mortgage crisis passed. I was wrong.
The extend of the problems associated with bad lending practices, when combined with a weak residential real estate sales market has had a greater impact on most lenders than I had anticipated. Lending practices are continuing to tightened, making financing less available to those marginally qualified. This is further exacerbated by declining real estate values which closes off refinancing opportunities for those without substantial equity in their homes.
Mortgage interest rates have not reflected reductions in Fed-controlled, short-term borrowing rates. In fact mortgage rates have actually gone up about 1/2% in the last month.
All this is still good news for the long term. When markets that are out of control correct themselves, the correction is rarely painless, but for the real estate and mortgage markets as a whole, restoring prudent lending practices is a good thing, and that’s where all this interim pain is leading.