We attribute this statistic to a few things:
- Most of the distress sales fit this price point
- FHA loans have increased in popularity helping buyers with smaller down payments
- Investors looking for best cash-on-cash opportunites are finding this market attractive
- Rents are still very strong for modest single family homes
With interest rates recent decline and many home shoppers finding rates around 4.5-4.7% for convential fixed 30 year financing we expect this to remain the strongest market segment in 2009.
The other hot selling segment has been the luxury property market. Less influenced by stringent financing and a sluggish economy, the ultra affluent are still buying expensive real estate. While market prices have had to become more competitive, luxury home owners are still finding sales chugging along.
The slowest market segments are the mid-range and upper mid-range homes which we are attributing to owners in the lower segment lacking home equity making "move up" sales tough. While sales are tough, they are not impossible, but home owners need to expect to be very aggressive with their pricing.
What to expect next?
- Prices to continue a slow creep downward
- Interest rates to slowly creep upward with inflationary pressures
- Sales to continue to increase in the lowest and highest segments
- More bidding wars for rock bottom priced bank owned property
- More lenders willing to workout short sales
Well, that's our crystal ball, well worth the price of admission!
Have a great month and as always, we're always here to discuss any of your real estate needs regardless of the challenging market.