Real Estate Update: What $350,000 Buys Around the Nation In the Summer of 2006

When a couple living in Bethel, Ct. tried to sell their modest three bedroom house on a quiet street in this western New England town, they were surprised when a real estate agent cautioned them to wait until the “market” softened a little on their street. What the agent for Buyer’s Capital Real Estate was trying to say to them was the fact that there were too many similarly priced homes for sale on the same street at the time. He said they might stand a better chance of selling their house once the inventory on that street thinned out a little.

The strength of the housing market and whether or not the real estate bubble is about to burst or grow across the country these days depends heavily on many variables, including whether you are a buyer, a seller. The section of town your listing is located and how much neighborly competition you face are just some of the regional factors that could mean a quick sale or a very long wait. In other regions, slow job growth, record numbers of adjustable rate mortgages and job loss are all factors which conspire to turn a booming real estate market into a busted one. In those regions While there is robust discussion about the real estate bubble bursting every where, the risk of this happening too varies from region to region and sometimes it changes from neighborhood to neighborhood.

While a once booming housing market has clearly slowed down in many parts of the nation as interest rates continue to climb, the US real estate market is not monolithic. The veritable strength of real estate “markets” across the country is littered with regional variables that all tell different tales.

In hot-to-trot markets of southwest Florida, speculation is high that steadily rising prices for new and existing houses was destined for a crash. The ride down there had been wild and crazy for buyers and sellers for a long time who saw the median price of homes double from $170,000 to $330,000 in just two years, according to First American Solutions. But now, that market is too ripe with sellers who are all probably trying to cash out their appreciation gains, among the highest in the country. An example of what can be purchased in this market for about $350,000 can be found at the
Bermuda Ridge condos.

It might be hard to believe but further west in the devastated New Orleans housing market, some real estate agents are seeing more than a recovery in a region that lost an estimated 350,000 housing units during hurricane Katrina last year.

“The city’s biggest residential brokerage firm - Latter and Blum - reports that just this past week, buyers signed contracts for 673 properties. That compares to 544 properties the same week last year,” according to National Public Radio. ” John Hazard is in the market for real estate. He’s an investment banker who sees post-hurricane New Orleans as an opportunity that needs to be seized. The New Orleans native is buying hurricane-discounted properties in the city’s historic Uptown neighborhood, an area filled with shops and restaurants.” The upscale Lakeview district of New Orleans was swamped when the 17th Street Canal gave way and flooded the neighborhood with 10 feet of water. A sprawling, eight-year-old, two bedroom home in the district subdivision of Eden Isles can be bought today for $295,000.

The market story in the San Francisco bay area is more somber. A number of convergent factors have come together in recent months to create a serious downturn for this region which has been hit hard economically in a number of ways.

House prices soared in the last fee years beyond any reasonable ratio to rents, salaries or housing value in the area. If you owned rental property, your property may have appreciated substantially in price or value but rents did not rise accordingly. The home buyer’s market everywhere is now overloaded with risky adjustable rate loans and the San Francisco Bay Area is no exception. These rates are vulnerable to rising interest rates and mortgage interest rates are clearly on the rise now, so more than 80 percent of mortgage loans in the region are adjustable so look for a backlash that will shoot mortage payments through the ceiling and slow an already sluggish real estate market even more dramatically.

The old cliché’ about location, location, location as the key to buying real estate investment, applies to the region for sure now. Times are tough here and promise to get even tougher. If you’re looking for gains, cheap mortgage loans or bargains, another location might be the right choice. In a short period of time, the region has lost more than 300,000 jobs, the worst income drain here in the last 60 years, according to recent labor statistics. Analyst say its worse than the car manufacturing problems in Detroit or the oil bust in the Houston area in the 1980s. “People without jobs do not buy houses and owners without jobs may lose the house they are in,” says an internet writer at http://patrick.net/housing/crash.html If you’re bottom fishing, that seems to be the direction Bay area real estate is heading.

“According to the California Association of Realtors (CAR), the percentage of Bay Area buyers who could afford a median-priced house in the region plunged from 20 percent in July, 2003 to 14 percent in July 2004.” The following year CAR then reported that affordability fell another 4 percent last year.

In the $350,000 - $400,000 range purchaser can fetch a modest condo like this one.