RealEstateRaves

Here is a look at the Median Price€ of a home in Redwood City during all of 2007.  I am sure you can draw lots of conclusions from this graph below.  But, let s be sure we are on the same page regarding median€€¦..as a refresher this is the point at which half of all prices are below and half above the price indicated at any given time or point on this graph.  So we have ended the year with a median price in Redwood City of  $839,000 after seeing this median mark hit $920,000 at its high point back in February.  Early in 2007 we were  hearing more and more about a subject called sub-prime loans€ but most of us didn t clearly understand what that meant?  We were hearing more and more negative news about the housing market and about how some 2 million loans were getting ready to reset in 2007€¦.we weren t sure what reset€ meant?  As the year progressed we all became very well educated and now most of us can clearly explain what sub-prime means as well as resetting€ adjustable home loans. 

If you are a seller you are challenged by what s happening.  If you are a buyer there is reason for jubilation and opportunity.  Every real estate market is good for someone.  What s happened to the Law of Supply & Demand€?  It s alive and well and lurking in our midst.  A [strong] case could be made for looming pent-up demand€ and a boom just around the corner.  That is to say, there are lots of buyers that have been patiently waiting to make their move and buy the house of their dreams.  They have been on the sidelines waiting for the market to crash.  Come early 2008 I think these very same buyers will begin to see the light and understand that prices are not going to crash and understand they had better get going and buy now before prices actually begin going back up. Ludicrous?  Not necessarily since interest rates are at all time lows€¦.hovering around 5%…..wow!  Historically, more homes enter the market in early January and February.  Just what s needed to feed this pent-up demand.

The mortgage folks are not going to fold their tents and go away€¦.to return when things get better.  Just the opposite!  In 2008 they will aggressively be finding ways to help people borrow and buy.  Mark my words!  So, if you are on the fence about buying or selling€¦take a long hard look at what well may be happening early in the new year and re-think your home buying or selling goals. 

If history is important and drives your ultimate strategy making decisions know that for the last 39 years in California homes across the board have increased on average more that 8% every year.  Do you really think in the land of plenty€ that this appreciation factor is really going to change in the longer term?   With the exception of the recent past and no other time during those 39 years have interest rates been as low as they are right now. 

Joe Parsons

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