Tuesday, February 28, 2012

2011 Housing Recap with 2012 Implications

Home Prices

  • Historic Appreciation is 4% Nationally, but was -4% in 2011
  • We were 24% below the trend line
  • Current Rate of Depreciation is NOT Sustainable
  • Gary Keller - "If you go above or below the trend line, there WILL be a correction."
Mortgage Rates

  • This is THE Moment in History that rates are at their lowest
  • NY Times called 2009 the "Golden Age" at 5%...Now as low as 3.87%!
  • The rates could maybe drop only 1%, if lenders eliminated all profit. Odds of that happening?
  • If money is a driver of when you buy...

The Affordability Index

  • Affordability Index - percent of income needed to pay mortgage
  • Homes have never been more AFFORDABLE in history of recorded time.
  • "Why should I buy when prices are down 30%?" Think Price vs Value.
  • Timing & Patience seperates Investors from Speculators

  • Have Perspective. Study History.
  • Average Home Prices are +77%
  • Average Monthly Payments are +1%

Kyle Pfaffe, REALTOR®
Keller Williams Realty

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