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How's
the Market Doing?
Scroll
down for this month's current market conditions.
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 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. - - - Ron Porter, GRI, EBA
For current real estate market
conditions this year and this month, click:
Realty
Times - Up to Date Real Estate Market Conditions in Northern California
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