So the February 2009 numbers are in. If you were hoping to find encouraging news, maybe March will look better. I find year over year comparisons to be less useful these days. We all know the year-over-year numbers are not looking good. We can of course compare February YOY numbers to January YOY numbers (and we'll do that).
- Closed Sales: Down 16%
- Median Prices: Down 18%
- Pending Sales: Down 7%
Feburary 2009 YOY versus January 2009 YOY
- Closed Sales: -26% in January versus down -45% in February
- Median Prices: +10% in January versus down -13% in February
- Pending Sales: -20% in January versus down -39% in February
So is now the time to panic? Not necessarily. We all know it's been tough out there and it could be January had some innaugural optimism while February's Dow 1,000 point dow drop and other depressing economic news led people to look but not buy just yet. Another super optimistic interpretation I heard about the economy in general was that the more things go down, the closer we are to finding the bottom.
Prices are still too high for sales to recover.
The new rules about % sold units for government backed loans means that for condos, banks actually have to lend without being able to sell the loan easily. Which means that they will look at income more seriously.
There are two ways to look at it. The folks who have the income to buy condos in Seattle want more for the money it would cost them. Or those who are OK with what they get do not have the income to buy.
I think that the disconnect in pricing is too much for developers to bear, which is why they will probably change condos to rentals pretty soon. I predict that the low end of pricing will do this more than the high end, both because low end is more affected by jobs and incomes, and because it is harder to rent high end.
Maybe it’s also worth mentioning the situation of people like me, who wants to buy but saw their downpayment money disappear in the market crash. It doesn’t help that condos are down 30% when my savings are down 50%… 🙂
Wendy, what are the new numbers for FHA loan limits on condo’s? I wanted to know if 20% would be required down on an FHA condo loan? If that is even possible?
The new loan limit is $567,500. If the condo is FHA approved, the down payment is 3.5%