What About Declining Prices?
Reality is Powerful…
After an unprecedented and unsustainable run-up in real estate prices during the 2002 through 2005 time period, prices are today corrected and showing signs of stability. As part of that correction, many sellers adjusted their pricing to reflect market conditions.
It is true that the median price is lower in 2009 than in 2008, but it is important to understand that the median price is the market mid-point, with 50% of homes selling for more than the median and 50% selling for less. It is not necessarily an indicator of value.
For 2009, current market conditions (first-time homebuyer tax credit, historically low mortgage rates, realistic pricing, good inventory) appear to be driving significant numbers of first-time buyers into the market and this group tends to buy in the "more affordable" ($200,000 to $499,000) sector for that first-time purchase, which has the effect of creating a predictably downward trend in the median price. Realtors continue to see activity in other price sectors, but just not at the same intensity as in the segment driven by first-time buyer interest.
