The real estate market is showing signs of life. Well priced properties are seeing multiple offers - listings in areas with high inventory levels. Of course the test will come as 100% financing goes away.
2006 was a tough year for real estate. Rising interest rates scared off some buyers - to the point that many investors got worried and put non-owner occupied property for sale. As buying activity went down and inventory levels went up, we saw softening in the form of long market times and higher levels of expired listings. Sellers adjusted list prices and offered incentives, some investor/ sellers pulled listings off the market all together. 2007 showed signs of benefitting from falling inventory.
Now the condo market will have to weather another storm. Just as soon as the "appreciation" word came back into our vernacular, the financing that made up apprximately 12% of all loans is gone.
Seller assisted financing will certainly play a growing role, as anyone with equity in their home will have an advantage by being able to offer a buyer an affordable rate on a second.
The good news is that the "test" is happening at the right time. While demand increases seasonally, the market will be better able to sustain and react to the tighter lending guidelines.