Wet. Cold. Hot. That was the weather as we moved into 2008. In other words, shifting.
That's what we'll see with the market in the first half of 2008 and the indicators are already out there.
- Mortgages: Interest rates remain competitive, generally floating between a low of 5.5% (which they hit Jan. 7 locally) to 6.25%. Some lenders who escaped the subprime slime will come out with creative packages to lure buyers.
- Financial markets: No predictions here except to say the gyrating stock market may scare some investors. There is a possibility that some will turn to real estate as a better bet for their money. It's happened before.
- Media coverage of the housing market. Watch it gradually decrease as the presidential primaries dominate the news. Good for the real estate market
- The presidential election: Bad for the real estate market. This will be my third election as a Realtor, and every time it seems to slow down the market as everyone become more preoccupied with the election. In typical fashion, the stock market goes crazy as it's jacked up on uncertainty of who will win.
- Buyer behavior (or seller beware): Buyers' offers will test sellers for their best price. Sellers, feeling pole-axed by low offers, should put on their game faces. Remember, you can always counter.
- Housing inventory: Up. Not good for sellers, who will have to offer the best product - meaning price and condition - in order to sell.
- Housing inventory: Up. Great for buyers, whose main problem will be deciding what to buy in certain areas.
- Rental inventory: Up, as sellers look for a way to wait out this market. Not good for new entries into this endeavor and hard on the veteran landlords.
- Housing prices: Slipping after hanging onto small gains in 2007. In December, sold statistics show that sellers were getting on average 95-96% of list price, after years of getting closer to 98%. Looking at the sales specifically, there were homes that sold for full price and others who took an offer 10% under list.
- Sales: This price-driven market will also have a season factor to it unlike in years past. I expect it to be a fast and furious February through June, when buyers whose moves are tied to the school year act.
- Sellers: Those who must sell by June 2008 should assess the competing listings and then try to put their homes on the market as close to the lowest priced home as possible. Homes should be on the market by mid-February at the latest.
- Foreclosures: Locally, I don't believe there will be as many as in the last half of 2007. I hope we've seen the ones that were due to over-reaching on what they could afford. Unfortunately, the next round of foreclosures be the heart-breakers, where people who were hanging on lost their grip because of illness, job loss, divorce or death in the family. Really, most foreclosures are very sad.
- The rest: Builders, lenders, Realtors and the like who have strong customer bases will survive, even thrive. But many will call it quits, be they builders who are over-extended trying to move a half-dozen spec homes, while they are bleeding $40,000 a month to the bank, or Realtors who thought this field was a way to get rich without having to work at it.
Janet English, RE/Max By The Bay, Daphne, Alabama
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