By Joe Palumbo III
The general consensus in the Queens area is that housing prices have dropped and that you can find a buyer for your home. However, that is still a difficult task to accomplish. Why?
Here is the grim reality of what is ahead. The good news is that housing prices have dropped about 7 percent since 2005 but stricter lending practices have definitely thinned out prospective home buyers.
The average sales price of a home is down to $395,000 from $425,000 in 2005. The average down payment on a home is now $79,000, up from $22,000 in 2005. Now, it doesn't take a St. John's finance major to see the difference and the disturbing trend.
It gets better. The required monthly pre-tax income is $7,700 today compared to $6,700 in 2005 — an additional $250 per week. This means that if you are currently making $20 per hour, you would have to work 12 hours more per week to meet these budget demands.
The days of no-down-payment loans, low down payments and adjustable rate mortgages with low teaser rates that helped struggling home purchasers stretch to buy that home are long gone. You are going to need a 20 percent down payment.
So How's Business in regards to finding a home buyer to purchase your home, even with home prices falling? Even though home prices have begun to come down from the stratosphere, the number of people who can now actually pull the trigger on purchasing a home has become very limited. Add the current economic turmoil into that equation, and if you are looking to sell your home, you had better (a) get comfortable or (b) be very realistic about the “walk away” amount you are looking to get for your home.
