Median single family home prices increased slightly in June rising 1.91% from $114,900 in May to $117,100. The 2nd qtr of 2011 was the 3rd highest on record trailing only 2010 and 2009. Inventory levels have been falling and median prices have been rising.

Perhaps the most often asked question is, if prices have risen 30% since January, does that mean all prices have risen that much? The answer is unfortunately not. The official number is simply a median price, which means half the sales occur over $117,100 and half under that amount.

Foreclosures have dried up which has taken many sales away at the lower end of the spectrum. While this does alleviate some pricing pressure to the downside, it doesn’t automatically make higher priced properties worth more. Supply, demand, and economics dictate that. In addition, of the foreclosures we are seeing hit the market, some are at the upper end of the spectrum.

Currently we have 2 properties pre-listed that will be well over $1 million. One is a large home near the end of Captiva Island, and the other is a 5,500 sq ft bay front home in Bonita Springs that features an elevator, pool, 2 docks, and much more. While you would think these eventual sales would pull up the average price, keep in mind they are only 2 sales out of over 1300, so they don’t influence the median price as much as they would the mean average price.

Interest rates may begin rising with the uncertainty over the United States credit rating. Inevitably it looks like Congress will fail to adequately address the root cause of our debt crisis and will place bandages over gaping wounds and $54 Trillion of unfunded debt which will not settle the credit markets long term. What we see today is all political posturing and kicking the can down the road, all the while Medicare may be broke in 6 years and not there for anybody.

It just seems funny that we’re hemorrhaging $1.6 Trillion dollars this year alone which equates to us losing $4.38 Billion every single day. Congress has been talking about cutting between $1 Trillion to $2 Trillion dollars out of deficit over 10 years in return for raising debt ceiling $1-2 Trillion dollars. So in other words, we’ll reduce our deficit about $100 Billion each year for 10 years while we increase it that much today, and it will only carry us through 6 months. The deals pay off nothing and we’re nowhere close to a balanced budget, let alone paying off any of the debt. I think if the American people realized what Congress and the president are really doing, or not really doing they’d demand some action. We’re not really doing anything until we begin balancing our checkbook and paying off some of the debt. Until then, we’re making it worse everyday.

For every 1% increase in interest rates it robs borrowers 9% in purchasing power. Let’s say you were going to buy a $100,000 property today but waited and rates shot up 1% due to a downgrade in US debt. For the same money you would now only qualify for a $90,000 home, which is not good because prices have been going up and you’re still paying the same monthly payment for less home. That’s assuming you can even find a home for 9% less money that meets your needs and isn’t gobbled up by investors. It’s getting tougher for first time home buyers on every front to purchase a home, from banks lending money, to interest rates, decreasing selection, etc.

This whole debt crisis and the excuse of a US debt downgrade is a farce. The credit agencies will downgrade us anyway even if we continue to keep raising the debt ceiling unless we get our fiscal house in order. It’s kind of like a family that agrees to take on more debt. If you take on too much, your credit rating will suffer. So don’t let the politicians fool you that they’re making significant cuts or we need this to avoid default and protect our credit rating, because that’s just Washington speak.

Housing has come under enough pressure in recent years without politicians devaluing our property values because they can’t agree on a budget. Prices have been rising in SW Florida, which is good for a change. Let’s keep the positive momentum going!