Positive Signs in the Real Estate Market

What are real estate professionals saying to homebuyers and sellers about current market conditions? The successful brokers and sales associates are talking about the strengths that exist in the market — not the negative media hype. Below are positive angles that appeared recently in the media and underscore why it is a good time to buy real estate.

Recent Quotes & Excerpts about the Positive Signs in the Real Estate Market:

Hope for Housing Market Improvement in 2009

While the economic news is universally negative, there are some bright spots. While unemployment has risen and will continue to do so, there are very few economists who are calling for anything higher than 8.0 to 8.5% for this downturn. Further, interest rates are at record lows in the mortgage and virtually every other market, a sure sign of the huge imbalance between the supply of cash and the demand for loans. It hasn’t hurt that the Federal government has also turned bullish in terms of providing huge stimulus.

Rising unemployment and declining interest rates are the signs of an economy going through the process of flushing out the excesses of a boom. And that’s historically what happens when an economy is in the early stages of a recovery. Some examples:

Ø Energy prices and prices in general have softened considerably and the purchasing power of families has increased substantially as a result.

Ø California home sales are up significantly from a year ago and in most of those markets better than the results for any year in the past three.

Ø The decline in closed sales for most regions of the country has bottomed out over the past six months. Except in a few states that didn’t suffer in the early stages of the downturn (Texas, North Carolina, New York and Tennessee are some examples) most every other state is either about even with last year at this time or only slightly below.

Ø Price declines have been relatively stable over the past six months – again for states and regions that were hit the hardest and the earliest.

Ø It appears that the carnage in equity and credit markets has leveled off as well for the time being. The Fed’s TARP program and other liquidity measures have at least staunched the crisis in credit markets and low interest rates are one result.

Based on all this we now believe that housing sales at the worst will be down another 4-6 percent in 2009. That is worst case on a national basis. There are already markets that are above their low points and others will join them this year. Any surprises will be on the upside of this level not the downside.