NAR - 2008 Housing Market Rebound
An economist for the National Association of Realtors predicts home sales will turn around in early 2008, thanks to more favorable conditions in the mortgage market. Lawrence Yun, senior economist for NAR also believes that some of our local markets in the Puget Sound region like Seattle and Portland are weathering this down trough in the housing market much better than other regions elsewhere in the country. The Emerald City welcomes your enthusiasm Lawrence…
I’ve watched the markets in the Puget Sound area for the last 30 years, with the last fifteen as a full time Realtor in Bellingham, and I think we will see a turn around in 2008, but more towards the end of next year. The markets will need time to work the negative chatter out of all the news reports were seeing so much of today before we realize anything approaching normal.
The real estate market in general goes through it’s own cycles, especially looking back over the last fifty years. These same type of trends will continue in the future as well. That crazy market we saw from early 2002 to Sept. 2005 was fed by a low supply of homes on the market, coupled with high demand and home prices that were considered historically low. Expectations in the market were that prices would keep going up, but those thoughts are unfortunately “Illusions of Grandeur”. Once the market was flooded with homeowners selling and builders rushing to add new homes, the pendulum switched as to much supply was added, prices were rising too fast and consumer demand went down once the negative talk took over. Welcome to the cycles of real estate.
The one thing I really think that’s playing the most havoc on the housing markets today is all this negative chatter about the sub prime loans of the past and other negative forces that tends to make home buyers nervous. That’s why I believe that once the negative news starts to dissipate and the economy can get on a more positive heel, things have a better chance of getting back to normal. I want to under score “Normal”, not those crazy upswings in prices. Will the housing market ever see double digit price increases again, yes, that’s part of the real estate cycle. Sharp up swings in housing prices are usually short lived though, followed usually by a buyers market and then a much longer normal market.
Steve Tyler, a columnist with the heraldNet in Everett, WA wrote a great article this month about the Puget Sound real estate cycles and went on to explain in detail what he has observed over the last 30-40 years. I highly recommend our local readers to check out that article to have a better understanding of what were going through in Bellingham, Whatcom County and the Puget Sound region currently.
Lawerenc Yun had a few more interesting comments that I thought Id add here in closing this post:
“Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year. Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.”
Yun says loan availability has continued to improve since August. He also notes that 2007, despite all the trouble in the sub prime market and the resulting credit crunch, still will be fifth highest year on record in sales of existing homes.
In his forecast, Yun projects existing home sales to reach 5.78 million this year and 6.12 million in 2008. New home sales are expected to drop next year, but Yun says pullbacks in construction will help reduce home inventory, helping home prices.
Yun also says median home values are expected to drop nationally this year but begin rebounding in 2008.
Jerry Campbell - Muljat Group - Bellingham, WA 98225 - Bellingham Real Estate