News: 2010 Sales to Rise 15 Percent
www.RickStrohm.com
Rick & Rick Strohm, Jr.
We all know there are cycles in real estate - natural trends of ups & downs. Most of us, hopefully all of us, have known that we have been in a "down trend" for quite some time. My father/partner, Rick, and I have been educating our clients by letting them know that the 'down trend' won't last forever - it's a buyers market at the moment - but that won't last forever. There are many potential buyers that are sitting on the fence, waiting to see what the market will do - unfortunately, many of those people will miss the "buy" they were looking for...as the market will pass them buy. The following excerpts were taken from a November 2009 in REALTOR© Magazine:
Home sales will increase 15 percent to about 5.7 million units and REALTOR® income will be up 20 percent in 2010, NAR Chief Economist Lawrence Yun told a packed room of REALTORS® today in a residential economic update at the 2009 NAR Conference & Expo.
Yun credited the home buyer tax credit with
unleashing sales on the lower-end of the housing market this year,
bringing up to 400,000 first-time buyers into the market who wouldn't
have bought otherwise. That influx tightened inventories of starter
homes, shored up prices, and helped reduce households' fear over
continuing price drops.
This virtuous cycle will continue now that
the federal government has extended the credit to mid-2010 and expanded
it to make a smaller credit available to repeat buyers and to
households with higher incomes. “The key is stabilizing prices and
preserving household wealth,” he says.
Yun predicts the supply of homes to
stabilize at the historic norm of six to seven months. Homes above
$500,000 will remain elevated in the near-term, but that weakness will
be offset by a hefty drop in starter-home inventories, which are
running at about a five months supply.
New-home sales, which comprise about 10
percent of the market, will continue at suppressed levels--about
550,000 units, down from more than a million during the boom--mainly
because builders have scaled projects way back, in part because
financing isn't available.
For the longer term, the huge deficit run
up by the federal government to shore up the economy remains the big
question mark. Although the deficit is expected to improve each of the
next three years, it will remain at historic highs. Unless the federal
government releases a credible plan for shrinking it, investors will
start to balk and interest rates will need to rise to bring them back.
Should inflation be the result, the housing recovery will be set back.
The time to buy is now - before the market picks up. If you're interested in Western North Carolina/Great Smoky Mountain real estate contact us today and let us find your dream property!
Rick, Jr.
Source: Robert Freedman, REALTOR® magazine