A Discussion On The Burnsville Real Estate Market

A Discussion on the Burnsville Real Estate Market

To The Burnsville RotaryRichard Tucker

Coldwell Banker BurnetOctober 5,2009

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Or. . .

What happened to your Real Estate values

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Where are we

How did we get here

Where are we going. . .

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Multiple factors lead to shiftHistorically low interest rates

Strong economy

“New” mortgage products

Little or no money down

Looser standards

No Doc loans

Pic and Pay loans

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Limited supply & strong demand

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Home prices w

ent up

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As prices w

ent up so did in

ventory

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Too much supply & reduced demand

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Historical average sales price appreciation

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So where are we today. . .As prices dropped

Buyers decide to wait and watch

Values dropped below mortgages amounts

Adjustable mortgages reset

Foreclosures increased

Creating a downward spiral

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Market forces begin to workLower prices induce first time homebuyers to

act.

Tax credit is a great incentive

Sellers re-think time to sell

Inventory begins to drop

Sales begin to pick up

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Where are we going now?Prices are beginning to stabilize in

the lower price ranges New listings Last week           Pending Last

week

0- 100 6 9 18 11

100-200        65 61 74 56

200-300        52 39 39 33

300-400        19 21 11 10

400-500        9 16 8 4

500-600         2 8 3 2

600+ 3 2 0 0

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Many factors will impact the recoverySales are up

but not in all price ranges

Continued reduction in inventoryWe may see more foreclosures

Impact of the tax credit

Over reaction to credit marketsUnintended consequences to some needed changes

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ConclusionsPrices went up and were unsustainable Traditional market forces reactedCredit markets collapsedMarket forces are correcting S & DGetting back on the traditional appreciation

track we were on

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If you bought before 2000. . .you had a paper appreciation. .and a paper loss. . .

but in the end you’re back on track