More Facts About Housing..

Housing activity is a function of several factors: Rates, the overall economy, supply, population growth, rental prices, sentiment, speculation, liquidity (easy financing terms, loans, mortgages) Over the past 5 years, rates dropped, supply expanded, population expanded, prices rose. That's normal. But then rates plummeted even further, prices rose more quickly. That is where we saw crazy boom. Now that we are seeing inflation problems, the Feds have raised rates and that is why we are seeing drop in prices.

Lets have a look at few interesting facts about housing/real estate.

* California is hit the hardest in falling home values in the nation. San Diego will drop more than 13% on average in 2007, Los Angeles more than 11% and Miami will have a 13.6% drop.

* However on the good side, Washington state and Utah are experiencing massive areas of growth. Texas is undergoing the largest growth in its history since alot of people are moving in from New Orleans due to Hurricane Katrina.

* In California, the standing unsold housing inventory is moving down rapidly, also a considerable drop in excess inventory in condominium conversions, with owners either selling out or reverting back to rental status. Town house and other low-density home building will continue normally, but there will be a cutback on high-rise development in urban cores.

* San Antonio was a market experiencing modest growth until recent times. It is predicted that it will appreciate 8.3%. Out-of-town investors flooded in, glutting the market with rental homes.

* In Colorado the record number of foreclosures has given it a bad rap. Home sales in Pitkin County, home of Aspen and Snowmass, were up 19% in 2006.

* Alot of borrowers are refinancing ARMs in the past six to eight weeks. One reason people are switching is that the difference in the rate on adjustable and fixed mortgages has narrowed. The rate on a mortgage that can adjust annually was 5.84% recently, compared with about 6.22% on a fixed-rate mortgage. Borrowers are opting to pay a little more for the fixed-rate mortgage to avoid the risk of a reset on an adjustable mortgage in the future.