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The Real Estate Market Outlook
ARE WE IN THE WORST OF TIMES OR THE BEST OF TIMES?
April 3, 2008
The answer to these postulations simply depends upon your focus. Our national media has been saying, and many continue to say that gloom and doom prevail. However, that bandwagon has lost some of its volume; much like winter gives way to spring. The real estate investment community most certainly took a colossal hit from an over-aggressive buying frenzy, fueled by unwise and unsafe lending practitioners, some who willingly duped borrowers they had cause to know could not honor their loans. Many borrowers signed loan agreements under the assumption that their investment would continue the upward spiral.
We Americans are a resilient lot and have shown time and again that when something is broken or flawed, we will fix it. The time for this fix is at hand and help is coming in the form of increased loan limits, low interest rates, government support to lenders, economic stimulus packages and the like.
Residential properties are adjusting to real values and are further influenced by real estate appraisers who in effect now govern what bankers consider when evaluating their loan portfolio. A reasonable profit is still available to sellers who acknowledge a simple truth. Consider an appreciation of 5% to 8% from a 2002 benchmark as an adequate return on investment and let go of the thought that your property is now worth multiples of that 2002 figure. The buying public is now viewing prices about 20-25% less than previous offerings.
How bad was 2007? It was the 5th highest existing home sales volume in recorded history. Since September, sales volumes have stabilized into narrow fluctuations, even managing a modest 2.9% increase in February, 2008 according to the National Association of Realtors@.
Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”
So, the prices are down, some way down. Interest rates are extremely favorable. The inventory of available homes is enormous and loan limits of federally backed mortgages have expanded to match housing costs. Now is the time to grab your pocketbook and take advantage of the best buyers market we’ve seen in many decades.
Lake Tahoe/Truckee 4th Quarter Market Report
Buyers Continue to Seek Purchasing Opportunities in
the Insulated Lake Tahoe and Truckee Markets. View Market Report
For more information about Tahoe real estate, contact Trudi Lee at:
530.583.4004,
Ext. 120 or
email:
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