If you are a regular listener to Real Estate Insight, you already know that one of my favorite lines when people ask me to predict the state of the market in the near future is "if I only had a crystal ball...." While the immediate outlook looks pretty bleak, I think that the bulk of uncertainty is behind us. We have a new administration that seems to be proactive about the money crisis, and the fact that we have acknowledged the recession means that we can stop fretting and finally do something about it. Rich, Steve and I put our heads together and came up with these trends for 2009
- Prices will continue to decline in the worst hit areas, California, Nevada, Michigan, and bottom out in most others. Combined with historically low interest rates, it is a great time for the first time buyers to finally get in the game
- Realistic Sellers will take their homes off the market if they can't get their price, this will result in less inventory, but the glut of distressed properties will keep downward pressure on prices.
- With limited inventory and under-market pricing on foreclosures, buyers unwilling to deal with the inherent problems of forclosed properties (deferred maintenence, dealing with the lenders) will find themselves competing over the good' listings.
- The foreclosure crisis has created wiser consumers, with a deeper understanding of real estate, mortgages, and credit enabling better decision-making going forward. There will be more transparency in lending practices, and the new administration will crack down on abusive lending practices.
- More home owners will lose their homes in 2009 to foreclosure and need to rent, which will put upward pressure on rental rates.
- Green features will become more important. Increasing numbers of buyers will opt for smaller homes that are within walking distance of school and work, and energy efficient features will increasingly influence home purchases.
- The internet will continue to outpace print media for effective real estate marketing. Buyers and sellers are becoming more and more tech savvy; tools like video, webcasts, and mobile search will become more and more common.
This Week's Real Estate Insight: Job loss will be the biggest hindrance to a housing recovery; you can't buy a house if you don't have a job. Hopefully, Obama has a plan for that as well
