CNN just published an excellent report forecasting depreciation in top housing markets in the nation.
"According to an analysis conducted by Moody's Economy.com, declines will exceed 10 percent in 86 of the 379 largest housing markets. And 290 of the cities will experience price drops of 1 percent or more The survey attempted to identify the high and low points of housing prices in each of the markets, some of which started declining from their peak in the third quarter of 2005. All are median prices for single-family houses.
Nationally, Moody's is projecting an average price decline of 7.7 percent. That's a jump from the 6.6 percent total price drop that the company was forecasting in June and more than twice that of last October's forecast of a 3.6 percent price decrease."
The major areas below are reported to be peaking the 3rd quarter of 2007 and to be "hitting bottom" (doesn't that mean rebounding back?) by the 3rd quarter of 2008. The amount of the changes in home values being predicted varies:
- Seattle-Bellevue-Everett -2.9%
- Tacoma -5.5%
- Portland-Vancouver-Beaverton -7.2%.
- Spokane -2.6%
Compared to Stockton and other parts of the country, we're doing pretty darn good.
"The Stockton, Calif., metro area, where Moody's predicts a 25 percent price drop, will be the hardest hit among the 100 most populated cities surveyed.
Prices in Stockton - in California's Central Valley - rose quickly through 2005 as many would-be Bay Area buyers, frozen out of the expensive San Francisco area housing market, moved in. That influx drove up the median, single-family home price to about $375,000. Stockton prices peaked during the first quarter of 2006 and have gone downhill since. Prices likely won't turn around until the end of next year."
Even though a 2.9% decrease in home value is not hugely significant, it can be if you're looking at refinancing out of a high loan to value mortgage. Especially when you factor in the tightened guidelines with loan to value and credit. Please don't delay contacting your Mortgage Professional if you have an adjustable rate mortgage that will be adjusting in the next two years or sooner.
On a home valued at $500,000, this would be a reduction of approx. $14,500 based on the predicted Seattle depreciation rate.
If you read the entire report that features the top 100 cities...you'll actually feel pretty good about how our local real estate seems to be fairing.
