Wow…have I been remiss in posting new material. The market has been so strange and difficult to predict that I just waited on the sidelines and watched the sales to see what was happening. It seems that sales are about the same in 2008 as they were in 2007. This is a good sign. Interest rates are creeping up to just under 7%. This is not a good sign. Home prices are increasing at about a 2%-3% rate over 2007. This is a normal range and is also a good sign. With all these good signs, why do we have the feeling that real estate is in trouble? Real estate is a local phenomenon, but money (interest rates, jobs, wages, prices, oil) are national considerations. We cannot divorce ourselves from the national trends even thougth things are moving along in Iowa City. We pay more for gas, heating, and well, everything. We pay a little more for interest rates, too.
I think people have a lower degree of faith in the future, and want to made darn shure that are getting a good value for their real estate purchase. I do too. Buyers a looking at 12 instead of 3 houses. We have more low offers that in the last decade. Also, for the first time I have seen in Iowa City, buyers are not qualifying for their loans.
This is not all bad. We should be responsible and make sure we are getting value for our purchases. We should be aware that finances are different now than in the past and travel is expensive and we are vulnarable to oil prices. We can still be secure, happy, content and free…and responsible and that is a good thing!