These days we continue to hear nothing but bad news about the real estate market from our media. Every newspaper, every tv newscast and all the magazines tell us of the difficult times everyone can expect. We have listened to the experts for two years now and watched the falling numbers of homes sold and the rising numbers of foreclosures.
Personally, as a Real Estate Consultant I don’t foresee any overnight changes. However, I do feel that the negative news media feeding frenzy is not helping home buyers and home sellers either. We eventually will see an improving market for both home sellers and buyers. Mortgage programs will become more realistic, interest rates may even be reduced again. Most importantly, home prices will gradually firm again as buyers take advantage of the numerous bargain opportunities available.
When will this happen? If you read the papers, you can predict the answers from the paper or “expert” who writes the article. Next year, the year after? Who knows for sure. I’ve heard that Donald Trump is saying it could be six months. Some realtors I’ve spoken with are predicting next summer at the latest. Many folks are less optimistic. No one has a crystal ball. Two years ago we began to expect a market correction, but who could have predicted all the fundamental changes we are seeing in today’s market.
On the plus side we are expecting large lending limit increases for FHA and CAL-HFA programs. This will recalibrate the definitions for jumbo loans and may make it possible for more folks to qualify for federally guaranteed home loans. The Fed is meeting twice more this year and it is predicted that we will see additional interest rate cuts. There are frequent hints in the newspaper of new federal legislation to relieve some of the difficulties as well. What final shape and extent this federal aid takes will be fascinating to observe.
Home prices are only now beginning to show signs of bottoming out in some of our local market areas. Some folks believe it will be years yet to see a full recovery. I think that different local markets will need different recovery times. One thing I feel certain of, folks will do better if they look at their own needs and match them against the homes available from now on.
Waiting to be told when to buy a stock rarely results in a profit for an investor. You must look and listen and form your own opinion. By the time your newspaper tells you it is safe to go back in the market, you will be six months or a year past optimum and have far fewer homes to choose from. Burn your newspaper! Go online and check your local market for yourself. You don’t need permission from a syndicated columnist!
Here is a link to the slide show presented by Leslie Appleton Young who is the Chief Economist for the California Association of Realtors at their convention two weeks ago on the 10th of October.
http://www.car.org/library/media/papers/pdf/10-10-07EXPOForecastLAY.pdf
(Press CTRL and click if the link doesn’t come up just by clicking it)
For more observations and surveys you are welcome to visit my website blogs at http://www.markthorngren.com/
Warmest Regards,
Mark Thorngren
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