Real estate recovery coming in the near future
March 19th, 2010The two biggest factors in real estate markets are employment and credit. Both of which are saying good things about the near future!
To start, employment has been declining for a good length of time. Time has been a bigger factor on the overall economy than sporadic job cuts. The current US unemployment rate is at 9.7%. [1] We did see a short time above 10%, but it isn’t expected again anytime soon.
With a relative consistency in job markets, people can begin to relax a bit and ease back into confidence in their employers.
The second factor for real estate markets, and it is a big one, is credit. Credit is tied closely to corporate profits. As Greece temporarily inspired fears in Europe, funds came pouring into US treasuries. [2] Now as American institutions are beginning to loan money out for things like mortgages, real estate deals are becoming a bit more common.
Nationally, sales have been dropping for, I think we can all agree, way too long. However, the past few months’ changes have been climbing to near zero. This suggests that the residential markets may have hit their bottom.
One factor to consider is the foreclosure markets. The number of foreclosures recently have pulled the average sale price of homes down. Even with that factor, the average price of an existing home is unchanged from a year ago.[3] This means that, once the bulk of homes with defaulted loans are foreclosed and sold, home prices will already have started climbing again.
So potentially, we are looking at a much larger amount of real estate being traded in the coming months. 2010 could be a very big year for real estate!
Sources:
[1] Department of Labor
[2] WSJ
[3] REALTOR press release
Related posts:
> Guest post: tax credit
> Real estate is key in downtown growth
> The importance of knowing your credit
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Posted By: Keller Williams Realty of Northern Colorado – Loveland Real Estate Agents, specializing in Loveland Real Estate and Northern Colorado Real Estate. 970.663.3777
