- The Federal Reserve left rates unchanged today, at 2% for the key benchmark, a surprise to some, but while they noted that the financial markets are under more strain with the credit crisis,they cited labor worries and inflation as their top concerns. Providing liquidity for the markets is high on their list as well.
- Mortgage rates are averaging 5.93% for a 30 year loan.
- Despite the talk that the government would not intervene AIG was offered an $85 billion loan from the US government in return for an 80% stake in the company.
What does all this mean for real estate in the San Fernando Valley and Burbank?
For now we have lower mortgage rates but very tight lending standards which means that buyers will have to work harder in order to qualify for a loan and put more money down.
In the long run we need for the financial markets to finish the clean up process in order to help stabilize our housing markets. Look for more foreclosures to come online over the next year and hopefully a return to a more normal housing market after next year.
Here are some numbers to consider:
In August of 2005 there were a total of 80 homes/condos sold with an average of 24 days on market for an average price of $636,630.
In August of 2008 there were a total of 60 homes/condos sold with an average of 60 days on market for an average price os $555,118.
There are several things reflected in these numbers:
- Longer days on market
- More homes are selling in the lower price ranges
- Overall prices are down, but not as much as the average would seem to suggest
Ana - good analysis. I expect we will continue to see changes in teh housing market as ther is fallout from all the recent Wall Street fuan and games. Good news is the rates are pretty good. Can be tough getting them, though, adn I imagine it will get more difficult.
Jeff