What do you get when home prices are high, loans are hard to get by and everyone wants to wait it out? A stalemate!
Calculated Risk picked up on DataQuick’s analysis of the market in California.
I thought by now sellers would have been more receptive to the fact that loans are very, very hard to come by. No too many people can afford to clunk down 6 months deposit, another 6 month back up and 20% down. Even with that, I have grade A people turned down. The problem is that at this stage, no matter what price you set, loans are difficult to come by and lenders don’t want to take a risk in a down market.
“The Bay Area’s housing market remained in a bit of deep freeze in November, when sluggish demand kept sales at a two-decade low for the third straight month. Prices continued to hold up best in the region’s core markets, while some outlying areas posted more double-digit annual declines, a real estate information service reported.”
“Sales have decreased on a year-over-year basis for 34 consecutive months. Last month was the slowest November in DataQuick’s statistics, which go back to 1988. Until last month, the slowest November was in 1990, when 6,015 homes sold.”
Hindsight is always 20/20 but this was predictable. If asking prices are high, plus the lending industry is in upheavals (no one wants to lend money in a market going down and be stuck with deflated home values), plus both sellers and buyers are waiting it out equals a stalemate.
Until prices stabilize, become a little more affordable, nothing will happen and Realtors will play the see-who-can-last-the-longest game.