Panic Party: You’re Invited (and Bring a Friend)
A recent poll conducted by the Associated Press measures the mood of homebuyers, sellers and owners. The results are a little surprising and extremely daunting. You can click the link to read the entire article, but I wanted to summarize the statistics for you because that is the part that is really telling.
- 60% of people polled said they definitely will not buy a home in the next two years
- Only 11% are certain or very likely to buy a home soon
- Nearly 3 in 10 people said they are concerned their home’s value will decline over the next two years
- 14% of homeowners said they are worried about not being able to make their mortgage payments in the next six months
- One in ten homeowners have ARMs, down by half from two years ago
- One in four people believe real estate values will fall in their neighborhoods
- Four in ten think home prices will rise
- 35% of those polled felt current home prices are just about right
- 50% believe real estate is overpriced
- One in ten said they think housing is under priced
- 9 million homeowners owe more on their mortgages than their homes are worth
- 43% of homebuyers worry that their purchases will depreciate over the next two years
- 59% believe this is a good time to buy residential real estate
- Two thirds believe it is harder for first time homebuyers to purchase now as opposed to two years ago and half think it is a very difficult climate for virgin buyers
Despite the sour tone of these beliefs, there are a few shiny ones among the bunch. The vast majority of people do believe this is a good market for homebuyers. The number of homeowners with adjustable rate mortgages has shrunk by half. While the general consensus is that this market is not a favorable one for first time homebuyers, that is more a reflection of changes in lending than price and I take that as a positive turn. The biggest source of panic is for homeowners who are upside down or stuck in an unmanageable financing arrangement, sellers who purchased during the height of the bubble, and buyers who want to purchase a home with marginal value. Who’s gonna climb back on the proverbial fence? Looks like most.
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