2008 Real Estate Predictions | Share Your Thoughts on Real Estate in 2008?

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Real Estate Agent with Crye-Leike REALTORS® 165062

With 2007 almost at a close, we all have a chance to reflect on the year and project where our business will be next year.   Will work be easier or harder in 2008?  Has the real estate market bottomed?  Do we still have a way to go?  When will the real estate recovery begin?  Please answer all 10 questions

  1. Mortgage Rates Lower or Higher? 
  2. Credit Loosen or Tighten?
  3. Numbers of Agents in Your Market Up or Down?
  4. Real Estate Inventory Levels in Your Market Increase, or Decrease?
  5. Better Real Estate Market or Worse?
  6. Buyer's Market or Seller's Market?
  7. More Foreclosures or Less?
  8. Homes Sales Prices Flat, Rise, or Fall?
  9. Condo Sales Prices Flat, Rise, or Fall?
  10. Commercial Real Estate Stay Strong or Start to Soften?

My Thoughts for 2008

  1. From what I am following on mortgage rates, I do not think they will get any worse.  I think we will enjoy reasonable rates for the foreseeable future.
  2. Credit I believe will tighten a little more before it moderates.  There is a search for quality taking place!
  3. The numbers of agents will slowly go down as it idd in the late 90's and early 90's.  First many agents will go to less expensive companies, and then many will leave the business.
  4. Spring markets will rise in inventory.  Leveraged owners will realize they are not going to make massive profits!, and mortgage resets will increase ten fold in the coming year.
  5. Worse real estate market first half of year, leveling out in the last 2 quarters of 08'
  6. More foreclosures as 50 Billion of mortgage resets kick in
  7. Flat to softer home prices
  8. Home Sales start to increase as prices are more realistic
  9. Condo sales A year away from major recovery
  10. Commercial Sales Start to soften.

Jim Crawford

 

 

 

 

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James Crawford ABR, Broker Associate

 

 

 

 

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Jesse & Kathy Clifton
Jesse Clifton & Associates, REALTORS® - Fairbanks, AK
Retired

Hi, Jim: I tend to agree with most of your predictions...
1) Rates will hold steady, but I expect to see a slight increase.
2) Credit will definitely tighten; I think the credit market will get much worse before it gets better.
3) We will probably see a 10-15% drop in agents.
4) Inventory levels will swell in March/April. Absorption rates will be 7.5-8 months; a 25% increase from today.
5) Better or worse for who? It's all perspective.
6) It will continue to be a buyers market.
7) We'll see a 30% increase in foreclosures (locally).
8) Home prices will continue to slide... perhaps leveling off in June/July.
9) Condo prices will remain relatively stable; if not increase slightly.
10) Commercial; industrial/retail will continue to stay strong; retail/office space will limp along.

Dec 26, 2007 05:02 PM #5
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I see the year ahead as a very bad one for the real estate industry and when things are bad for the real estate industry, it will be bad for the mortgage industry. 

I haven't changed my mind about a minimum two years to find a bottom, perhaps 3 years.  We've been 2.5 years in recovery, but only 1 years since the industry recognized that there is a problem. 

1.  Higher. 
2.  Tighten
3.  Down
4.  Increase
5.  Worse
6.  Buyer's
7.  More
8.  Fall
9.  Free Fall
10. Soften

You've inspired a post.  See you later. 

 

Dec 26, 2007 10:21 PM #6
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Fairbanks, Alaska Realtors Jesse & Kathy Clifton  Thank you for responding. I know different parts of the nation will be be slightly different.
Dec 26, 2007 11:08 PM #7
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Homefinders, Real Estate in MD & VA, Lenn Harley, Broker, New & Resale Homes  I think you are right about condos big time!  They were the most exaggerated segment of our market.
Dec 26, 2007 11:10 PM #8
Rainmaker
485,179
Philip Turner
MCCUE MORTGAGE COMPANY - New London, CT
Mortgage Banker Since 1980

Here are my thoughts - as a mortgage banker in CT.

1.  Rates should stay about the same.  It usually seems that during a presidential election year nothing moves to dramatically up or down.

2. Credi will continue to tighten.  The clients with the good FICO scores will be fine.  Everyone else will find new challenges.

3. Number of agents and mortgage people will drop.  Not enough business for everyone to make a living.  Also, license fees for Realtors will push people out of the business.

4.  Real estate inventory above $300,000.00 will grow.  Below that level there is good activity with first time home buyers.

5. Gradually better as the bad loans flush through the systems.

6.  Definitely buyer's market.  Not a good time to be a seller.

7.  More foreclosures - Lots of people having problems with no easy resolution.  CT Families and FHA Secure are not working well  - yet.

8. Until the inventory comes down a little I think prices will stay the same around here.  Employment is still strong in southeastern CT.  As mentioned above, the lower end of the market is doing OK around here.

9. Same as above #8

10. Not qaulified to speak on this one.  My expertise is strictly residential.

Good post - Thanks.

Dec 29, 2007 10:03 AM #9
Rainmaker
34,045
Matt Clark
RE/MAX Results - Cincinnati, OH
Cincinnati Real Estate
Jim I like your outlook for 2008.  The hardworking agents will survive (and even do very well!)
Dec 29, 2007 10:52 AM #10
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy
I'm going to do like Lenn and write a post.  I'm posting it to the official A/R predictions, too.  I think that you are spot on most of it, but I see a few key differences... but hard to argue your experience... very hard indeed.
Dec 29, 2007 12:47 PM #11
Rainmaker
898,547
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

Jim, considering the  answers you gave, seem to agree.

Mortgage Rates Lower or Higher?  They will stay lower.  Raising the interest rates will slow the market even more.

Credit Loosen or Tighten? Credit will tighten.  I'd like to see programs for first time home buyers improve.

Numbers of Agents in Your Market Up or Down?  Agents will continue to rise, only a few will drop out.

Real Estate Inventory Levels in Your Market Increase, or Decrease? Our market will continue to increase....maybe not as much as other parts of the country.

Better Real Estate Market or Worse? For all of us, I wish for a better market.

Buyer's Market or Seller's Market? It will continue to be a buyer's market.

More Foreclosures or Less? Foreclosures will continue to rise at least another year.

Homes Sales Prices Flat, Rise, or Fall? Prices will continue to drop if inventory rises.

Condo Sales Prices Flat, Rise, or Fall? Condo sales will remain the same.

Commercial Real Estate Stay Strong or Start to Soften?  Commercial will continue to rise.

Hope you have a wonderful new Year

 

 

Dec 29, 2007 01:08 PM #12
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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PHILIP TURNER-MORTGAGE BANKER SINCE 1980  Thanks for your response!  Commercial I see some excess in retail, and office space. It is not my expertise either, but I cannot miss a lot of commercial vacant properties building.
Dec 29, 2007 02:23 PM #13
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Matt Clark  All real estate is...a cycle!  It is not all up, nor is it all down!
Dec 29, 2007 02:25 PM #14
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Jim Crawford
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Lane Bailey - The REALTOR for Car People  Thanks!  It is going to be interesting.
Dec 29, 2007 02:26 PM #15
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Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
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Kay Van Kampen Springfield Missouri Real Estate  Kay thanks fo much for your response!  In the Atlanta area agents rose from about 8500 to 45000 in a few years A 300% increase.  Sales may have risen about 20%. Now sales have dropped back to sales levels that existed in the early 90's 3600 sales a month.  Inventory should really be about 48000, but has risen to 85000 and remained there.  Even though prices did not go crazy in Atlanta, the sheer inventory volume will move prices down.

Dec 29, 2007 02:31 PM #16
Rainmaker
223,010
John MacArthur
Century 21 Redwood - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes

James - Lenn Harley sent me. That is supposed to carry some weight in your world. If not, I do believe I can scratch together enough jing for admission.

Ten questions -

  • Mortgage Rates Lower or Higher?
  • The answer here is yes. Mortgages rates have always been on a roller coaster ride. They come down and they go up. It is really tied to the availability of mortgage money. All the hoopla is boiled down to supply and demand. 

  • Credit Loosen or Tighten?
  • I hope that the current tightening continues. The only way real estate value can increase is if someone actually owns some of it. If it is all financed it becomes just another commodity. Part of our current problem is folks are trying to pay mortgages and they actually can't afford the toaster.

  • Numbers of Agents in Your Market Up or Down?
  • I think the number will decrease, but not as quickly as some may assume. In this market, one sale can provide enough revenue to stay active two or three years. The integrity of many on the fence is closely linked to those that really belief lightning will strike again. If lottery ticket sales decrease, I will believe the number of agents will follow suit.

  • Real Estate Inventory Levels in Your Market Increase, or Decrease?
  • There is a limit to how many bricks we can pile on any area. The amount for sale will increase until such time as the prices come down to a point that make the inventory affordable. There is little affordable inventory and a great deal of over priced inventory.

  • Better Real Estate Market or Worse?
  • Hell James, the market is never better or worse. It is what it is. The advantage seems to swing back and forth between buyer and seller. The agent that recognizes the market will always have a good market.

  • Buyer's Market or Seller's Market?
  • It could be a buyer's market if prices were lower. It could be a seller's market if they dropped their prices. That seems to indicate it is a stagnant over priced market.

  • More Foreclosures or Less?
  • There will be more foreclosures. The raminfications of loose lending have not been totally felt. The combination of increased inflation, level income and lenders looking at shrinking bottom lines will result in more property going to foreclosure.

  • Homes Sales Prices Flat, Rise, or Fall?
  • Sales prices will have to come down. You will have to dig to see the truth. Some individual sales may occur that appear to indicate higher prices. Don't believe stats that do not tell the entire story.

  • Condo Sales Prices Flat, Rise, or Fall?
  • God only knows what condo sales prices are. Builder incentives and money forefeited used to reduce sales prices make this a big old pot of pricing gumbo...you don't know what is in it but you keep coming back for seconds. Condo's are entry level, they will always have a market.

  • Commercial Real Estate Stay Strong or Start to Soften?
  • I am not part of the club. I don't know enough about commercial to comment. I do know that they have been building and rebuilding commercial space in this area all my life.

    That is my story and I am sticking to it.

    Dec 31, 2007 05:50 AM #17
    Rainmaker
    124,734
    James Lockard
    RE/MAX Properties - Saddle River - Allendale, NJ
    Realtor, Allendale, NJ
    Pretty much agree with all of your assessments. However I think in number 5, I think the market over all will be flat the first half of 2008 with an improvement in the second half of 2008.  Too mnay buyers out there now just sitting on the sidelines. I do see them starting to get back in the flow of things once the new yeaers starts.  Cdall me optimistic I guess!
    Dec 31, 2007 06:07 AM #18
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    Jim Crawford
    Crye-Leike REALTORS® - Atlanta, GA
    Jim Crawford Atlanta Best Listing Agents & REALTOR

    John MacArthur  Thanks!  I love Lenn I think she is the greatest!  I like your response, because you have provoked my thoughts with the way you responded! 

    1. I agree that agent numbers will drop but not over night by any means.
    2. It really isn't a buyers market because of lack of credit and inflated prices.
    3. Stats are not the entire picture!  I like that!  (As in Median house prices!)
    4. "The agent that recognizes the market will always have a good market."  Great quote!  I totally agree!

     

    Dec 31, 2007 06:13 AM #19
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    Jim Crawford
    Crye-Leike REALTORS® - Atlanta, GA
    Jim Crawford Atlanta Best Listing Agents & REALTOR

    James Lockard - Realtor, Allendale, NJ  Thanks for your response! As far as # 5 here is my concern.  What started a lot of the spin in 2007 was the mortgage resets on many sub-prime loans.  In 2007 there were about 50 billion in resets that caused most of our trouble.  Next year the amount of resets is 10 X higher.  There are 500 billion in resets due in 2008.  That is where I see murky waters, and more trouble ahead.

    Dec 31, 2007 06:18 AM #20
    Rainmaker
    307,468
    Ryan Hukill - Edmond
    ShowMeOKC Real Estate Pros of KW Elite - Edmond, OK
    Realtor, Team Lead
    Excellent predictions Jim, and more in line with what I would expect for the coming year. Have a great 2008!
    Jan 01, 2008 10:34 AM #21
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    Jim Crawford
    Crye-Leike REALTORS® - Atlanta, GA
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    Ryan Hukill - Edmond, OK Homes & Real Estate  Ryan best wishes in the coming New Year!
    Jan 01, 2008 10:45 AM #22
    Rainmaker
    236,392
    Debbie Summers
    Charles Rutenberg Realty - New Smyrna Beach, FL

    Jim,

    Great questions... I'm right in line with your answers.  I think that this will be the year that "amateurs" as I like to refer to them, will be getting out of the business.

    Jan 02, 2008 04:50 AM #23
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    Jim Crawford
    Crye-Leike REALTORS® - Atlanta, GA
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    Debbie Summers, REALTOR®, Lake Mary, FL   Debbie from your lips to Gods ears!  LOL!  Happy New Year!
    Jan 02, 2008 07:43 AM #24
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