Will 2010 be the turning point in Hesperia Home Values

Following three years of declining home prices across the nation and here in Hesperia, the end of the housing slump may be in sight.  Home sales consistently have been rising, the surplus of houses is shrinking, and most economists believe home values nationwide will hit bottom in the second half of 2010, that’s good news for homeowners hoping to sell or rebuild lost equity, but not before declining an additional five to ten percent.

Thoughts to Keep in Mind:

• Mortgage rates currently are around 5 percent, and should remain low for the next few months, partially due to the Federal Reserve’s ongoing purchase of mortgage-backed securities. However, if the economy quickly turns around and inflation fears resurface, or the Fed’s stop purchasing mortgage-backed securities, rates could rise to as high as 6.5 percent, slowing demand and pushing down home values.

• According to some analysts, the market will remain tilted in favor of buyers over the next year, but that power gradually will be reduced as conditions in the housing market continue to improve.

• Buyers hoping to purchase or invest in a lower-priced, entry-level home should expect some competition from investors and other buyers. To remain competitive, buyers are advised to put down as much cash as possible, as many investors are offering to make all-cash deals. Another factor to keep in mind is that offers below listing price often are outbid by others.

• Some home sellers are postponing listing their homes until the market recovers. However, timing the market is difficult, so homeowners thinking of selling should carefully weigh their options.  Congress recently expanded the federal tax credit to include some existing homeowners, but they must close before June 30, 2010 to qualify. Although existing homeowners are not required to sell their current home to qualify for the credit, those who plan to rent out their current residences should be aware that many lenders require borrowers to show they are financially capable of paying two mortgages, or show rental income for at least six months. Discretionary sellers should discuss their options with a Realtor® before making a decision.

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