Credit Crunch Reflected in Market!
Wednesday, December 19, 2007
I've just received the new multiple listing statistics for the month of November. Pending sales for the month were down by 60%. This probably reflects the credit crunch left over from August, September and October.
Year to date through November, sales are down by around 38%. Inventory of new listings for the year hit nearly 300 and with 130 sales at the end of November that gives sellers a 43% chance of selling their homes this year.
As inventory builds and sales have tapered off there is now a 14 month supply of homes. By definition, this is well into a buyer's market.
Bigger news may be that Countrywide will quit doing sub prime loans. If other lenders follow suit, and they probably will, this will eliminate an additional 10 to 20% of buyers from the marketplace therefore increasing seller competition for those buyers.
New for 2008 will be even more emphasis on credit scores. Watch your credit score! If it goes under 680 you will pay a higher interest rate and extra fees for your loan. This will apply to conventional loans and probably FHA will fall suit.
Interest rates are likely to rise as inflation possibilities increase. Historically, rates are fantastic. With a good credit rating and a down-payment, now is an excellent time to purchase!
