Late July update

Lots of changes in the market this month. Sales are holding very well against last year and the overall market is only off about 5% for my primary market and values are off about 12%. More on that next month.

Countrywide's statement the other day was not the surprise to those of us dealing with sellers every day. The fact is the real estate market in much of the US that had very heated markets over the last few years are going to give back much of the gains. My guess is that most markets will strip back excess appreciation to net gains of 5%-7% depending on area on a year to year basis. That of course will leave people that refinanced their homes 2,3,4 and yes 5 times owing more than their homes are worth. It was one thing to re-finance for better terms but the number of people that looked at their homes as piggy banks is astounding that took real cash out of the homes and spent it.

What is import to focus on is the unit sales, other than a major adjustment in expectations of value, homes are selling and will continue to sell. When asked if this is a good time to buy the answer is yes, but only if you feel comfortable that you will be living in the home at least 3 years, otherwise rent for the next year or two. Owning for 3 years or more will make the purchase of the home a justified purchase and the market will have worked itself out by 2010.