Lower prices ends

Since 2007, the poster of the estate is Back to the Future every night: it is three years after a decade of crazy up the stone market is a radical return to the past. Several months of falling prices, falling volumes of transactions and loans have been falling to its level in late 2005. But we got to the end of the film in major cities, the decline in sales, and price, is behind us.
For the moment, nothing noticeable yet in official statistics. It was not until December to have confirmation that the decline is over. In late 2006, already, while the data were not available, Challenges took the risk to announce, with two months in advance, the end of the price increase in headline: "The summit is reached.
If Challenges take the lead, is that in this sector, data are very long to collect (see interview below cons). The most reliable, those of notaries have between three and five months behind reality. Suffice to say that when they are exploited long ago that the market no longer reflects the image they give in! Now say that these statistics are available? That market remains depressed, as trading volumes drop by 30% over one year and that prices should fall by 8 to 9% over 2009, annual rate, after declining 10% last year.

Recovery started
By going on field interviewing individuals that are performing operations, questioning the real estate agents, solicitors, developers and bankers, we found a different landscape: the activity has already been restarted a few months.
Certainly, in the outskirts of towns in the country, "the situation remains tense, with declines ranging up to 20% in two years," says Christopher Pinault, Director General of the Credit Foncier. But elsewhere, in the most vibrant market, prices have declined steadily. And in some areas in Paris intra-muros, in its suburbs in the inner cities of the province, they begin to recover.
In Paris, for example, prices rose 3.5% over the last three months. And in Courbevoie, Hauts-de-Seine, "the buyers have regained confidence at some point decide to buy before they sold," explains Fabrice Cochet, head of the Agence de la Gare. A few miles away at Asnieres, Thierry Gondouin, Guy Network Hiccups, made the same observation: "The demand is strong, we lack today of goods to sell."
The recovery also affects the downtowns of several major cities. In Lyon, between the Saône and Rhône, Fnaim observed since July, a sharp increase in the number of transactions, and even higher prices. In September, rates for the former Lyon have increased by 1% and even 3.6% if compared to prices last winter. Ditto for the new, which shows prices up 5% over the year to 3 640 euros per m2 on average.

Request reassured
In Marseilles, the increase is less straightforward, but since the turn of the summer, demand picked up again. This does not mean that potential purchasers are buying anything at any price: they must see a real drop in prices in a neighborhood they decide to return. Many sellers have not yet understood. In Rennes, for example, they are "too greedy", sorry Eric Robiolle in its Lices Agency, which continues to discourage potential buyers, but many ...
Bernard Cadeau, president Orpi, see also, throughout its network, a return of buyers. "We wanted to remain cautious at first, but it is now confirmed: the market wakes up. Moreover, some of our agencies have made in July and August its best sales since opening. "Wet Michel, professor at Paris X-Nanterre and connoisseur of the industry, confirms this:" Prices have been falling early in the second quarter. We will see in January when we have statistics notaries, says he. These show that between the second and third quarter of this year's activity has sharply increased, probably over 15%. "This is not a flash in the pan: for Christopher Pinault, the Credit Foncier, 'increasing needs, coupled with lower stocks of new goods and a decrease of homes coming onto the market will necessarily lead to increased demand in the former. "

Credit revived
The reasons for the return of buyers are partly psychological. "They found the expected decline has not arrived. As the financial crisis seems over, they have recovered to make plans. And we saw them back in our study, analysis master Robert Panhard, notary in Paris.
But the return of buyers is also due for a real estate agent in Paris called "double" effect Kiss Cool "of real estate: a layer of lower prices and a layer of lower lending rates" ... For the improvement on the credit front is spectacular. Last year, banks were holding tightly to tap their credit. But since the summer, they have wide open. As Patrick Werner, CEO of La Banque Postale, the only bank that had continued to pay during the period, "it is not we who have changed their policy, they are our competitors!".
A change is explained: after their misadventures in the financial markets, banks have turned in their traditional clientele of individuals. They struggle to attract new customers. Moreover, adds Joel Boumendil, CEO of ACE, mortgage broker, "they realize they will struggle to achieve their business objectives in credits before the end of the year. So they are working extra hard. " And borrowers benefit. "In September, says Sandrine ALLONIA, design manager of online broker Meilleurtaux.com, we have registered some 50,000 applications for credit, against 38,000 in 2008 and 40 000 the previous year, before the real estate crisis. And the situation in October was interviewed on the same model. "
Banking institutions are more lenders to borrow themselves cheap. Result: their lending rates had their biggest drop since ... fifteen years, falling to 3.95% on average (see p. 90, credit conditions for banks). For Geoffroy Bragadir, spokesman Empruntis.com loan broker, "it is difficult to imagine the effect this fall on borrowers, but one year power purchase real estate seems to have improved Deplus 20 %.
An example: BNP Paribas offers for a loan of 200 000 over fifteen years, 3.84%. In our number "Featured Property" Fan last, at the same time, the rate for the same loan was 5.25%. In one year, the bank has lowered its offer by 1.4 points. The effect on interest is spectacular. In the first case, our borrower pays more than 73,300 euros in interest over the term of the loan. In the second, it should more than 99,300. In one year, it saved 26,000 euros in interest!
The gain in purchasing power is even more important taking into account the lower price. Imagine a couple who could repay, in 1998, a monthly payment of 1,500 euros. This couple could have time to pay the equivalent of the monthly payment, an accommodation of 184 m2. In late 2007, given rising prices and soaring interest rates, its purchasing power had fallen in m2 to 79 m2, two times less than in 1999. This year, it increased to 93 m2. This means that in one year lower rates and lower prices have combined to enable him to afford additional 14 m2.
Even with a smaller budget, this increase in purchasing power is significant. Of Toulouse, for example, which last year had a capacity of monthly payment of 1,000 euros, 150,000 could borrow euros and buy a 3-rooms (54 m2 exactly) to 2 790 euros per m2. Today, these same Toulouse can borrow EUR 166000 and buy a 4-rooms of 65 m2 (in 2497 euros per m2) ...
In nine, this effect is accentuated because the buyers will benefit from several additional aid: VAT at 5.5% (against 19.6% in the former) in some neighborhoods, the Pass-land, the loan helped to buy the land then the walls and finally the zero-interest loan, which covers about 60% of buyers and the amount is doubled until mid-2010. "By adding these measures to lower prices and interest rates, the gain in purchasing power of buyers in the new can reach 50%," said Olivier Mitterrand, CEO of developer The New Builders, which expects sales in 2009 higher sales in 2007.

Coeur market blocked
This does not mean that all problems that have caused the collapse in sales two years ago have disappeared. The main point of concern, analysis Sebastien de Lafond, CEO Meilleursagents.com, "is that the natural heart of the market, the family home, remains blocked because the middle classes are reluctant to return." A heart that still represents more than 100,000 transactions each year. So, for now, says Christian Musset, President Cogedim Sale, "the market is very concentrated on help (first-time buyers) and the very wealthy."
Why the middle classes are reluctant to buy? Just because they are, mostly, selling their property before buying another. But banks have opened the floodgates of credit, but careful not those of the closed bridge loan. The Second-time buyers (those who sell before you buy) will probably not many for some time. For Laurent Vimont, president of Century 21, this is changing: "In one quarter, says he, the number of buyers increased by 21% nationally and 35% on Paris."
But competitors do not detect tremor: the real estate market of the family home will probably be the last to unjam in France. For it is released, observes Olivier Mitterrand, "should be an economic recovery, particularly a decline in unemployment." But that is another story.