There are more and more houses coming on the market everyday and we are seeing more price reductions than prior months. In our local market many of the homes are sitting and not getting the activity that we saw earlier this year. Why is this? Well one theory is the buyers are waiting for the market to plunge further. Another is the buyers are thinking that interest rates will still go lower perhaps to rates we saw a year or two ago. Another is that the foreclosure market is going to infiltrate our “normal” market and prices will plunge. What we do know is that currently the interest rates are still at an all time low for the conventional loan and jumbo’s are hovering right around 7% how low does the market need to go without affecting the interest rates? We do know when prices drop interest rates go up; is this going to happen again? I would love to hear from you…
