San Luis Obispo Ca Real Estate

PROPERTY VALUES NOVEMBER 2006

After five years of a booming real estate market, sales prices have begun to succumb to the unsustainability of double-digit annual increases. Many potential first-time homebuyers have dropped out of the market due to the high prices.These new high home price levels were caused by the influx of many new investors as well as loans that allowed people who could not afford what they were buying to get into the market. The frenzy was fueled by easy access to 95%-100% financing and regular news reports of skyrocketing home prices. While the inventory level of unsold homes has begun to drop,sales volumes remain flat after absorbing the decline we have experienced in 2006. In some markets the low-end will suffer due to increasing foreclosure activity, ultimately dragging down prices at all levels. Fewer buyers are in the hunt,partially due to the holidays and to uncertainty about where prices are going.