16
Ron Porter's Buyer's Advocate Articles
Helping Home Buyers understand...
How's The Market Doing these days?
I get asked
that question a lot. As you may recall there have been swings between distinct
buyers and sellers markets. When I started in this business in 1985 a strong
buyers market was in effect. Interest rates were coming down through the
13% area from a high of 21% a few years earlier. In 1986 rates came down
under 10% and buyers started coming out by the hundreds creating a shift
to a sellers market.
In 1987 interest
rates went under 9% drawing out thousands more buyers. At the same time
huge sums of money started coming into our local housing market from Hong
Kong and Taiwan. The resulting shortage of homes for sale caused a sellers
market. In other words, sellers were king of the hill and home prices went
through the roof to artificially high levels.
Another thing
happening about the same time as lower interest rates was that the defense
industry was cutting way back. This made a drastic negative effect on the
northern California economy, especially in the Bay Area where defense spending
had been high. Huge numbers of employees who lost their jobs put their
homes on the market.
Home prices
peaked for single family homes in February 1989. Condos and townhomes were
lagging, undervalued and getting multiple offers as single family home
prices started weakening. By the end of 1989 condos and townhomes also
peaked. We were experiencing the switch from a sellers market to a buyers
market as laid-off defense workers boarded up their homes and moved out
looking for work in other states. Home values started decreasing for the
first time ever. By the time the real estate market recovered 6 years later,
it was 1995 and home values had dropped 20% in most Bay Area cities. Except
for a slight dip after the dot com crash, real estate prices have been
rising rapidly since 1995.
My
Newsletter - Up to Date Real Estate Market Conditions
Thank you. Ron Porter, Exclusive Buyer Agent.
Beware
of pitfalls in buying a home. Get free CD: "Avoiding Costly Mistakes in
the Home Buying Process"
HomeBuyer
Agents, Inc.
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