California Real Estate Broker #00961923 I 2008 All Rights Reserved I
Listing Broker has attempted to offer accurate data, it is deemed reliable but not guaranteed. Buyers are advised to confirm all data provided.
This segment of the market saw a lot of foreclosure activity because many of the homes in the newer neighborhoods of Nipomo were financed during the now infamous sub-prime loan era. We saw prices drop dramatically between '05 and '07, at which point many people believed the worst was over and due to the low prevailing mortgage rates and more affordable prices for first time home buyers, the market began to clear and many buyers found themselves competing with other excited homebuyers who were chomping at the bit to get a deal. Well as we found out, the deal was about to get a lot sweeter and many buyers realized that they bought during a landslide and they were right in the middle of the mountain. Values declined at record levels in the end of '07 and they continued sliding until the middle of April '08 were, once again the rates were right and buyers began competing over the new significantly reduced homes . The summer of '08 was fairly stagnate but affordability was up and during the fall of '08 the market saw another surge of buyers. Then December '08 came along and we saw the biggest price decline yet, caused by REO asset managers slashing prices on foreclosed homes for a quick sale. Also, investors are beginging to pick up the pace on purchasing residential income properties, because the market is at a point where some properties will cash flow with a relatively low down payment. Their newly found desire to speculate is supported by the weak numbers coming out of the commercial property sector and the increasingly strong multifamily numbers which indicate a high forecast demand rental housing in the area.
The Million Dollar question. When will housing values bottom out? While this may be an area of much debate, if you were to look to the numbers they paint a supprisingly bright picture in Nipomo, CA which has been hit as hard as any place in the county. Of course the real million dollar question is what will happen once prices do hit bottom. Of course no one knows, the future of the fragile economy relies upon too many factors. During an increasingly complex time in real estate history, such a simple chart does not take all of the factors into consideration, but it does bring up an important point. Due to its inherent risks, real estate generally appreciates at a higher rate than other safer investments. On average around 5% annually since the 70's. If it were to keep up with historical precedents, disregarding the bubble, we should be approaching a point where the lower end of the market is right on line with an average rate of appreciation based on a starting point during middle of the 90's which was the last market bottom and prior to the speculative boom now known as the housing bubble.
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