Mortgage rates and prices are low. The average 30-year mortgage rate was 5.06% in September, down from 5.19% in August, Freddie Mac data showed. The NAR reported the median price for an existing home last month was $174,900, which is 8.5% below $191,200 in September 2008.
Whats the big deal about that? It represents the reduced bargain prices from the influence of short sales and bank owned deals. Foreclosures are heavily weighing on average sales prices and will for the next year or two. Homes in good standing that are for sale are being pulled down by these distressed properties. The carrot is inventory is coming down ..8 months average right now.. Real estate has never not come back and gone up higher. URE is long term play 4-5 years from now could be at 30 bucks. Not a bad annual return. Throw all the bad news you want dankyo or whatever your name is..you'll be a long before its over..
Everyone knows that I am long term bullish on reits. The short term issue is that prices may fall even harder than expected. Sales are a double edge sword. The inventory cut back is heavily due to not market forces but the california forecloser moritorium that should have ended around Sept. 15, 2009. If you have been keeping your ear to the ground you would hear that foreclosers increased in september and refinacing is still a major issue. Over the next few months we may get a new test of the bottoms in property prices. Plus reits in thier last quarter announcements were still worried about lower earnings and feared the mounting unemployement numbers. The big breath of fresh air could be GDP but we are still hearing the Fed warn about Commercial Realestate. The -8.5% price decrease is the bigger issue than an increase in sales. That is the way I see it short term.