www.RickStrohm.com It looks as if the real estate market is improving everyday. We are witnessing a slow turn around in housing. Here are the items that point to a real estate recovery in residential resale properties:
• Home affordability is the highest in years. • The money from the stimulus package is beginning to flow into the market. There are 2000 road and infrastructure jobs that are shovel ready to begin. • Consumer confidence grew at a faster rate than anticipated. • The 10 year bond is floating between 2.8% & 3.2%. Therefore, mortgage rates should remain soft for the near future. • Thirty year mortgages are near 4.25% and fifteen year mortgages are near 4.5% in some markets. Rates should remain below 5% possibly through the remainder of the year. • Timothy Geithner, Secretary of the Treasury, is still moving toward creating a new Public-Private Investment Program to capture toxic real estate assets thereby freeing the balance sheets of the holding companies and banks, enabling the lending institutions to lend to the consumer. Investors are looking into the program to see if it is profitable to invest in these types of securities. This is different from the Resolution Trust Corporation where they sold the assets one property at a time. • Mark-to-Market received a necessary adjustment to the concept allowing flexibility by modifying economic value of an asset to a value higher than zero, even if there is no market to purchase the assets. Modification of Mark-to-Market is beginning to accelerate lending. • Banks are loosening bank to bank lending, freeing up capital quickly. • Banks are getting their toxic paper off their books and in turn investors are returning to the market. • Banks have been put through a rigorous stress test and have held up under the pressure. • Some of the twelve trillion in cash that is both corporate and personal is re-entering both the stock market and the real estate market. • In the stock market, equities have shown real growth moving from a low of 6500 on the Dow to near 8000 recently, showing the market may have bottomed and investors are returning. Bond yields will remain flat near term. • Foreclosures are trending at a flatter rate. This will slow the depreciation of value of distressed properties in the marketplace. Short Sales are helping values to stabilize. • Fed Chairman Ben Bernanke still sees a positive growth rate by year end. • Mortgage qualification requirements have stabilized. • Property values, outside of foreclosures, have stabilized and we see appreciation in some markets. • Although unemployment continues to climb, it is close to peaking. • Oil per barrel will remain in the high $40 to the low $60 range for some time. • Gas is still in the $2.00 a gallon range at the pump in most locations and will remain a positive factor for the recovering economy. • Inflation will remain in check for the near future and you may see some deflation in the short term. • Many lots still have active permits, thereby allowing builders to begin construction on new housing sooner than expected. Keep an eye on your community: as new homes begin to come out of the ground, resales will increase also. Remember: the "time to buy" real estate is NOW, starting today. We can win in this economy! We have greater knowledge than many agents in our market place. Contact us today - Rick & Rick - and let us show you how to make your mountain real estate 'dream' a 'reality'! |