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The Short-Run vs. the Long-Term Picture

Reblogger
Real Estate Agent with Benefield Realty

 

Interesting post here from Rob & Jeannie Steward, enjoy...

 

Original content by Rob & Jeannie Steward - Realtors® 335893

 Never did we see a more important dichotomy in the releases on the state of real estate in the past week. First, Standard and Poor's released a report that stated it will take three years to clear the shadow inventory from the markets, though this number will vary widely based upon location. Three years of shadow inventory indicates that the real estate market will continue to be a drag upon the economy for the next few years. Second, an article was released by CNN/Money that indicates we are heading towards a long-term housing shortage (See Real Estate News Section For More Information). There is plenty of present excess inventory as the amount of shadow inventory has been estimated at anywhere from four to eight million homes, however, in the long-run we are not building or replacing enough units to keep up with the long-term demand of population growth. What does this say? It says that real estate is a great long-term investment, especially at today's prices and rates. The problem always arises when we think about real estate in terms of the short-run. During the boom everyone was looking to make a killing. However, real estate is a long-term investment and anyone purchasing a home should be measuring its worth over decades, not months.


Meanwhile, there seems to be some life in the markets. In the past several weeks the stock market seemed to be taking every piece of news negatively while it adjusted to the fact that the economy was growing more slowly. The past week was not only the second positive week in a row for the markets, when negative news was released the markets seemed to bounce back more quickly. For example, the housing start and permit data was well below expectations on Wednesday and jobless claims rose more than expected Thursday. However, each day the markets ended the day recovered from early losses. Could this be the turn after a correction? Oil prices seem to be reacting pretty much the same way. Higher oil prices point to markets that are seeing brighter days ahead for the economy. Of course two weeks do not constitute a trend, but certainly the period provides fodder for optimists.


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Rob & Jeannie Steward ~ Weichert, Realtors ~ 20400 Observation Dr, Ste 200 ~ Germantown, Maryland 20876 ~ Direct: (301) 213-7351 ~ Office: (301) 540-1330 x180 ~ Fax: (301) 601-0250 ~ E-Mail: Rob.Jeannie@gmail.com ~ www.HomesByRobandJeannie.com ~ We Work Twice As Hard For You!

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