[quote=sdrealtor]CAR
Have you really been losing properties you were interested in to FHA buyers? I just dont see many around here. In fact only 20% down seems to be unusual. I think you are looking at problems in others areas and projecting your frustration to this area. I’m pretty sure you arent competing with FHA buyers around here.[/quote]
It’s all about substitution. If FHA loans are propping up prices in O’side, Escondido, Vista, etc., then our area will be propped up as a result.
It’s the spread between these markets that moves prices, IMHO. If someone can buy a nice place in Escondido for $200K-$300K less, then they’ll be more likely to buy there vs. here. When the price difference is only $75K-$150K, they’ll be more likely to buy here. The manipulation in the mortgage and foreclosure markets is creating artificial price compression which prevents the fluid movement from one area to another that results when the market is free to adjust based on fundamentals.
I know you think this area is “special,” but it was just as “special” relative to other nearby areas twenty years ago. The bottom end fell out before the govt/Fed began manipulating the markets. The deflation was just beginning to hit the mid-high to high ends when the govt/Fed began their interventions. They’ve stalled it for now, but I fully believe they can only do so temporarily (though that could still be years, admittedly).
The same pricing pattern is happening in ALL areas across the nation — it is not just happening here. That makes me think it is more about market manipulations/actions than it is about our area being “different.”
They can’t prevent it forever. If the bottom end can’t work properly, the top end will. It’s just going to take a while longer.
