Throughout many conversations with sellers over the last year or so, I have discussed where the market HAS to go, before a true recovery takes hold.  Where the market has to go is to a place called affordability.  In 2005 and 2006 home prices jumped far beyond what many people could afford, and ultimately reached a point where homes just stopped selling.  And like a pendulem, it the prices began to swing in the other direction…. then plummetted in the other direction.

The hottest portion of our market, and make no mistake, this segment is hot, is the homes that are around $150,000 and below.  In the Fredericksburg real estate market, that price point specifically involves mostly first time home buyers, and investors.  When a market moves to the point where first time buyers are back in the game, then it is reaching a healthy point again.  I have seen more first time buyers purchasing homes in the last few months in the Fredericksburg real estate market, than we have in the last few years.

So, when I saw this article today from Realtor Magazine, I felt compelled to share it.  Take a read.

Home Affordability Hits 18-Year High
Housing affordability is reaching record levels with nearly 73 percent of all homes sold in the first three months of 2009 considered affordable.

That’s the highest percentage ever reported by the 18-year-old, quarterly Housing Opportunity Index, compiled by the National Association of Home Builders and Wells Fargo Bank.

To be considered affordable, a family making the national median household income of $64,000 must be able to devote no more than 28 percent of their income toward housing costs