Friday, March 4, 2011

More Signs That The Bottom Is Here

In an article on Sunday, February 27, 2011, the Wall Street Journal gave reasons as to why 2011 might be the end of the Housing Crash. They give reasons to be optimistic, and project that it might make sense to jump into real estate.

Housing is more affordable than it has been for decades. This may actually be the redistribution of wealth that many conservatives were worried about during the last presidential election, though the cause of the redistribution is squarely
 placed on Wall Street.

Nationally, the cost of a house is equivalent to about 19 months of total pay for an average family, the lowest level that has been at for 35 years. This is the first time I have heard of ownership in those terms. Trying to use that number specifically for just the downtown Charlotte market is difficult due to the lack of data indicating the average income for downtown residents.

When the bottom was / will be reached is difficult to pin down, but everyone agrees that the worst is over. Prices are historically low

, and even another 5% drop on a $200,000 home would only result in $10,000 in savings, or about $50 per month.

Another interesting change is that FSBO (For Sale By Owner) are becoming increasingly rare. Owners are realizing that they often will surrender more than the 6% commission when getting involved in the negotiation and process of a normal sale of a property. Something as simple as pricing the property can become an issue if a subsequent appraisal does not support the owners view of the property's worth.

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