Well we have returned from snowy CT and are ready to get back in our business routine. We have been working on our business plan and have consulted several resources to determine where to spend our marketing money and what we might expect from the economy. There were several interesting predictions in the National Association of Realtors January edition. For example, in 2006 the average 30 year fixed interest rate was 6.4% and remained the same in 2007. It is predicted to stay around 6.5% in 2008.
The economic indicators suggested that inflation would remain the same, gross domestic products would be slightly higher as well as the unemployment rate.
What we found the most interesting was the percentage of home sales. Existing home price sales were up 1% in 2006 and fell of 1.7% in 2007. There is no change expected in 2008. What this says is that the sellers who were holding out from 2005 and 2006 to make even more money are out of luck. This also indicates that people who don't have to move will not put their homes on the market for speculation which will help the seller who has to move due to life changes or transfers because there will be less competition. The forecast also indicated that the number of sales would remain the same at 5.7 million nationally.
The biggest down turn was in new home sales. In 2006 the sales were 1.1 million. In 2007 the sales dropped to 796,000 and are expected to drop even further in 2008 to 693,000. For the consumer this should mean even more incentives for them to buy new homes.
Keep in mind that this is a national forecast and not a Richmond Virginia forecast. We are still holding in there at better than the national market.
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