HOME MARKETING ALTERNATIVES

EAST BAY ECONOMIC OUTLOOK

Updated 10/06

Note: The following are opinions based upon the authors experience and observations.  As no one can accurately predict the future, and ask our readers to draw their own conclusions. 

Prices

The meteoric rise in Home prices have now officially have ended.  Currently home prices are stable or decreasing somewhat.  Inventories are much higher than we have seen in many years.  Typically, the holidays see a small decline in prices.  We expect the same this year.  Should interest rates continue to increase, this will likely cause prices to fall.   What is helping to keep the market stable is continued economic health of the country, as seen in consumer confidence, lower oil prices, and a health stock market.  In the early 90’s prices declined up to about 15% in the East Bay area.  Conditions appear to be similar, but the direction of interest rates, as well as the economy will ultimately decide the fate of prices.  Supporting prices are a shortage of homes, particularly more affordable homes. 

Market Activity

Market activity has continued to decline off of their historic highs.  Homes have stayed on the market longer than they have for the past couple years.  Multiple offers are becoming quite uncommon, and homes on the market for 6 weeks selling at a discount off their asking price is much more common.  The number of new homes being built is still high, but has also moderated from the pace of the last couple years.

Interest Rates

Interest rates are a large issue in affordability, and are at their highest level in about 4 years.  "Typical” rates are as follows:

National Averages, Source: Yahoo 10/18/06

It pays to shop! There are MANY types of loans available to meet your needs and risk tolerance level, so do not be discouraged.  We have worked with many lenders and would be happy to assist you in finding the best loans available. 

 With Best Wishes on your Search,

Brad Kaune

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