The Real Estate Market: Where are we Now?
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Are we weathering the worst of the market now, have we hit bottom already, are things picking up in predictive markets? While no single source can provide the definitive answer, assessing information from different sources often brings the future into sharper focus for savvy agents.
Consider the information below, and feel free to further your research through these and other national sources. Then the next time a potential client asks you the basis for your professional advice, you'll be able to explain the why's and how's behind your expectations and analysis.
- Mortgage Rates Drop Below 5%: Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.98 percent during the week ended March 19 from 5.03 percent the prior year, marking the lowest rate since 4.96 percent in mid-January. Experts say rates could fall further in response to the Federal Reserve's announcement that it will add $1.2 trillion to the economy to alleviate the credit crisis.
Source: Tulsa World, Tulsa, OK, March 20, 2009
- According to the Associated Press, US housing construction posted a surprisingly large increase in February, showing improvement in all parts of the country except the West. The Commerce Department reported that construction of new homes and apartments jumped 22.2% in February compared with January. While the dramatic increase seems a harbinger of better times to come, industry experts remain cautiously optimistic.
Source: Associated Press, Martin Crutsinger, (AP Economics Writer), March 17, 2009.
- Frank Nothaft, Freddie Mac vice president and chief economist recently experessed that: "The economy slowed by 3.8 percent in the fourth quarter of 2008, LESS than the market consensus, with inflationary pressures held at bay. Meanwhile, personal incomes fell by only HALF as much as some market forecasters predicted. [The bottom line is that] low mortgage rates and falling house prices have made housing the most affordable in 19 years."
Source: UPI.com, Business News: Bottom Line Improves the Housing Market, February 5, 2009.
Also keep in mind that in October 2005 - near the peak of the real estate boom - the median sales price for a home reached a staggering 7.3 times per capita income in the United States. By May 2008, that number had fallen to 5.7 times per capita income, which is in line with historical norms.
Further, the national sales figures that grab all the big headlines do not necessarily apply to the state of Georgia. In fact, when hard-hit states such as Florida, Arizona, California, and Nevada are taken out of the statistical mix, the overall picture present in the overwhelming majority of the US is much more encouraging, and not nearly so gloom-and-doom. Let's not project another state's statistics onto Georgia.
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