One of the primary sources for news here in the Phoenix area tends toward the "doom-and-gloom" side of reporting on the state of the real estate market. There is no shortage of analysis by reporters, market analysts and the guy down the street. We tend to pay more attention to the analysts, however. Even there, you will find a wide variety of responses on where the market is now, and where it is headed.
Although we must rely on some of this analysis, we must also look at the smaller aspects - what is happening in specific neighborhoods. But for now, let's focus on the big picture. It is obvious that the real estate market is down, not only locally but nationally. Statistics seem to be announced daily regarding number of sales, median prices and the like. The big question on everyone's mind is "Have we hit bottom yet?" Again, depends on where you are. We have always had the philosophy of looking at things as the "glass half full, not half empty". Even with this, there are definitely pockets where it is half empty. Looking at the overall picture we have always said this market will recover quicker than most other markets. We have the job growth, climate and livability that continues to attract people.
We reported last week on the outlook from an analyst at Countrywide. That pretty much stated that while we may not have hit bottom yet, it is close. And when the recovery really starts to take hold, investors will be well-positionned for another nice upswing. Here is an excerpt from a Bloomberg News article this week:(Bloomberg Dated 7/0 5/07)
U.S. bank executives also say the subprime problems haven't spread to other parts of the mortgage market. Bank of America Corp. Chief Executive Officer Kenneth Lewis said last month he expected U.S. growth to accelerate soon because the housing slump is coming to an end. Subprime defaults are expected to rise as initial lower rates offered to lure borrowers expire after two or three years and many homeowners will face difficulty meeting the increased monthlypayments on their mortgages."
So once again, who do you listen to? Like any financial advice, it pays to look at a wide variety of sources. Just don't let those sources be predominately media-oriented. Regardless of when the recovery starts, whether you are a normal homeowner or an investor, the expectation is that you will be just fine. It is no longer a question of when will the slump end. The question isn't will there be a recovery, but when? The next question is how big and how fast? That seems to be the question more people are anticipating an answer for.
Adam Tarr, ePro
Sharon Kotula, ABR