The values don't have to be quite right, its the concept that we are after. Notice that 50% of the real estate is classified as less than nice (ie Crappy to OK).
As a buyer, your interest will lie with the 50% to the right (nice to plush). In just generalizing, half of the market is really non existent. We could define "Real Crap"; as too old and run down, or gang neighborhood or an absurd asking price for say a 700 foot starter home. Nice could be defined as; "better than anything we have been shown before by this realtor," or brand new. Excellent could be defined as something we would like but cannot afford.
Just from reading the other blogs and comments, it looks as if its the "Nice" and the "Excellent homes are selling. My interpretation of this is that these people who are selling, are reducing their prices to accommodate the perspective buyer. Home builders top the list, and anybody that was lucky enough to buy before the tremendous price rise I would also include in this group.
Notice how sales in the right side of the bell curve would skew the "Median Home Sale Price," even higher when the seller is reducing his expected price (ie the sellers house was valued at 700k but they were willing to accept 600k) If the median price was 500k, you see that increase in a declining market.
So what are we looking at? 50% of the sellers on this bell curve have bought high and are stuck, you can't sell low. Considering the numbers, this is an awful lot of stressed real estate!
The banks or financial institutions that are holding the paper can see what has to transpire next, and it looks as if, "Maybe if we give it some more time, "Real estate could come back and save our ass!"
Loan writers are still cranking out the loans, fewer of them, but the game is still being played. Just where is the money coming from? Maybe from some GSE (government sponsored enterprise)--I wonder who could be buying the notes?
No comments:
Post a Comment