…and the downward spiral will continue until everyone forgets about it.
We’re not denying the real estate market has/is experiencing a bit of a shake up, but all the “sky is falling” reporting is getting a bit tiring, and in no way an entirely accurate representation of the San Francisco real estate market. Don’t call this cheerleading, call it pointing out the bites that most people overlook.
On SFGate today, Carolyn Said had this lovely title to her article, “Mortgage crunch has even wealthy buyers scrambling for credit”, and the first paragraph read:
Mortgage woes have moved upstream, landing even in tony neighborhoods.
The credit crunch now is hitting home buyers from all walks of life, not just subprime borrowers with poor credit. That in turn could mean fewer buyers – and lower prices.
But you have to read way down in the article to get to something we feel is a significant point that is too often over-looked:
The big unknown is how long the credit crunch will last. Many experts said they think the tight market for jumbo loans to people with good credit is likely to last only a few weeks.
“The situation at the moment is pretty dire by many accounts, but history suggests this could easily be a short-term overreaction in the credit markets,” LePage [Andrew LePage, an analyst with research firm DataQuick Information Systems of La Jolla (San Diego County)] said. “A three-week phenomenon isn’t going to sink the market, however bad it is at the moment.“
Again, we’re not saying there isn’t big change happening and many buyers, even in our “immune” market, aren’t feeling the pinch. What we’re saying is that it is not as bad as everyone makes it out to be.
Looking nationally we see more of the same reporting on cnnmoney.com with their article “Home Prices drop for fourth straight quarter”, of course pointing the finger at the nasty Realtor. Get into the middle of the article and you’ll see that there are indeed markets that are doing just fine, and we’d be willing to bet it wasn’t Realtors driving those prices up, and in many of those areas you’d have to assume there are many sub-prime borrowers.
Pockets of strength included Salt Lake City, where prices rose 21.9 percent, the most of any metro area, to $233,100. In the Pacific Northwest, Salem, Ore. prices rose 16.7 percent to $227,900, and Spokane, Wash. prices went up 10.4 percent to $197,700.
To add even more to what we’re saying, have a look at some rates quoted on Bankrate.com and play around with the “Modify Local Search” area you see on the right of the screen. Doesn’t look too bad, does it? It’s worse than it was, but still not bad. Just get your credit above 700!
The moral of this rant, is to let you know that indeed our market is feeling a bit of a pinch, but it’s not nearly as bad as they’re telling you.
–Some rates quoted on Bankrate.com [bankrate.com]