Saturday, March 22, 2008

Tacoma Real Estate Market Listings Soar, Prices Drop

The number of listings in the has ballooned to over 2600 in the MLS. There were 250 SFH Listings on the Tacom Real Estate Market in May of 2006, that is over a 1000% increase since I started tracking inventory on my own.

Prices have dropped close to 10% from last year. Sales are down 25% from a number that already saw the inventory outstripping the demand. Mortgages are harder to get. Washington
was deemed a "soft" market making mortgage insurance companies shut off 100% financing.

Have you tried getting a non-owner occupied loan with a LTV for more than 80%? They basically don't exist, taking another segment of the buyer population out of the picture. Even if prices keep dropping, many Americans don't have the savings to put 20% down.

One disconcerting factor that has gotten some media attention but has not been internalized by many in the Real Estate market today is demographics, good old demographics.

There are 78 million baby boomers approaching retirement fast, with the upper limits already making the transition. Their typical real estate life cycle involved trading upwards for bigger and bigger home ala the McMansion in the suburbs. The problem is that many Gen X'ers even in places like Tacoma, myself include, do not want a sprawling house in the suburbs with the awful commute. What will be done with these homes in the current Real Estate Market crisis?

Time will only tell....

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