Future Outlook: Very Bright
Existing-home sales including single-family homes, townhomes, condominiums and co-ops - slipped 2.2 percent following several months of stable activity to a seasonally adjusted annual rate of 4.89 million units in December 2007 from a pace of 5.00 million in November 2007, and are 22.0 percent below the 6.27 million-unit level in December of 2006 according to the National Association of Realtors®.
For all of 2007 there were 5,652,000 existing-home sales, the fifth highest year on record; however, the total was 12.8 percent below the 6,478,000 transactions recorded in 2006.
The reason for the decline in 2007 real estate transactions lays clearly with the overwhelming, but mostly unfounded negative media hype regarding the impeding burst of a so called 'real estate bubble' and the failure of the very same media to focus on the real hampering crisis and question and investigate its largest advertiser's activities in the free market place - the financial institutions, which were throwing initially ‘cheap' money at low and middle income households, without income verification, high points and hefty bonuses to procurers.
Let me tell you right now: US Real Estate is safe and sound! Don't believe what the media is attempting to tell us, as their ‘bad news' and continuously riding on it sells their paper and commercial time slots on TV - after all who would watch, if it weren't for the sensational stories or those that are supposed to instill fear in us and make us drool, jitter and longing for more, like a cliffhanger on a soap opera show? When you can impose fear over people -you'll control the masses!
Here is why I think that we'll have a bright future ahead of us and why there is actually no reason we shouldn't have record transaction numbers in 2008 and 2009 and 2015 and 2030.
America claimed 100 million people in 1915 and reached 200 million in 1967. The 400 millionth person is likely to arrive in 2043, according to the Census Bureau. We are a growing nation! We are a hardworking nation, we consume, although too much and frivolously, but we work, we create and we lead the world in innovations! We may lose jobs in certain sectors, but others will be created in an ever-changing global economy. We are the most flexible nation, we can move and go about the country - and have done so in the past, where jobs are being created.
Immigration plays the biggest role in our country's growth. The Census Bureau estimates that a migrant enters the country every 31 seconds. There were 9.7 million foreign-born people in the country in 1967. By 2004, that number had mushroomed to 34.3 million -- 12 percent of the total population. The share of the population who will be Asian and the share who will be Hispanic is projected to double between 2000 and 2050.
Along with China and India, America is the only Industrial Nation with a statistically growing population and the only country where population growth is stabilized among developed countries - unlike most European countries, especially Germany, Russia, Great Britain, Italy and Greece whose populations are slowly declining.
The U.S. population has more than tripled in the 21st Century, at a growth rate of 1.3 percent. Even if we would build a fence at our borders today and stop immigration significantly, statistically Mexicans for example have higher fertility rates than non-Hispanic whites and our population would continue to grow because of that built-in momentum.
Immigrants are hardworking people, usually becoming small business owners first then starting to employ people from their neighborhoods and growing from that into sometimes multi-million or even multi-billion dollar corporations. Forbes Magazine ranks many of the top companies in this country as owned, controlled and founded by migrants.
I feel based on these facts, a lot of real estate will still need to be built and then sold by Realtors!
True problems of the future will be affordable housing, the adverse effects a burgeoning population has on the environment, mainly our water resources, pollution, especially in larger cities that make our children and the elderly sick and the consummation of fossil resources without little being done to investigate better, more environmentally friendly alternatives.
Some of the markets exploded exponentially, it was an unhealthy growth dictated by the greed of a few speculators and a natural and healthy price-correction has taken place. Some markets may not have fully bottomed out yet, but real estate is local and only we, as professionals really know our marketplace. Unfortunately there are many reported foreclosures - for whatever reason they may happen (unemployment or real mortgage payments are kicking in after just paying interest on a loan for several years), but also here the real facts are somewhat distorted in the media: Yes, foreclosures are up, but many loans (actually more and more!) are being reorganized during that process - keep in mind that the banks do not want the liability of keeping and maintaining a property and also many properties are being purchased up by investors, who are usually looking for renters once they buy investment property and deals are being struck between former owners and new owners!
Some of my thoughts. Good luck everybody matching buyers and sellers in 2008.
Katerina Brosda, Broker Associate
http://www.miamijustlisted.com/
Feel free to repost with reference to author, so we may start a balanced educational campaign ourselves and if nothing else start a discussion. Comments are welcome and appreciated J
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