The Housing Market - Why pundits may have it wrong ?

By
Real Estate Agent with The Somers Team at KW Philadelphia

 

Every time I turn on the TV, I hear the doom and gloom of the housing crisis and the mortgage mess.  Yes, we are in it.  But what I have been hearing is how long the "pundits" are saying we will be in it.  Into the later part of 2009 ?  Into 2010 ? 2011 ?????

WRONG !!

Maybe so, if oil were to go to $170 a barrel and with high inflation, mortgage rates would go into the mid 7s.  The FED would be forced to raise rates. I was a bit worried myself that rates would climb over 7 percent with the increase in the price of oil and other commodities over the last couple of months

 

 

But how nicely things have changed with the collapse in oil and commodity prices !!!  And is anyone talking about it ?  Not yet !!  Here is the scenario:  If oil keeps on its downtrend and other commodities such as gold and copper continue downward, the FED will have the opportunity to LOWER rates after the election.  The only talk has been the possibility of a rate hike, but no one is talking about this option as of yet.  Excuse me... two people... Bill Gross, the bond king from PIMCO, mentioned that possibility on CNBC the other day and Chris Somers with RE/MAX Affiliates in Philadelphia : )  On a side note, did anyone catch Bob Toll's update with Toll Brothers this past week ?  If not, I would recommend it.

Here is a good possibility now - with mortgage rates potentially staying firm in the mid 6s and ranging between low 6s and up to 7 percent on volatility, in addition to the housing bill and tax credit and the election, the housing market could be prime for a rebound in mid 2009 or the second half of 2009 at the latest !  No one is talking about the pent-up demand that is out there, but it is there and growing !  All the media pundits are stuck on the doom and gloom prognosis as that is what sells !!!   

What does all this mean ?  Buy a house now !!!!  Or from an investment standpoint, buy some financial stocks, investment banks or some homebuilders !  Or as a realtor, grow your web presence now and fast : )

The Somers Team - Philadelphia Real Estate          The Philadelphia Real Estate Blog

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Rainer
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Larry Riggs
Century 21 Redwood - Frederick, MD
GRI, SRS Your Frederick County Specialist

I feel your pain. I am the president on our local association of Realtors and we have been trying whatever we could to educate not only our agents but the public in general. We've been promoting the Surround Sound program from NAR. I have been promoting some of our local sites that talk about our local job and commercial market. Fortunately I am friends with the business editor of our local newspaper but it's still an uphill battle. After all, good news just doesn't sell!

Aug 17, 2008 12:29 AM #1
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The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
Delivering Real Estate Happiness

Larry,

I hear you.  The industry "experts" and the media all want to report the same message - doom and glood.  Fear, fear, fear...  it is a shame that we live in a fear-based society.  The flip side is that because we do, it provides for the opportunites to build massive wealth.   I think the people in the real estate industry that make it through this "downturn" will come out that much more successful.  Not for nothing, my wife and I are having a great year - it is not easy but we are already quite pleased with our 2008.

The Somers Team

Aug 17, 2008 03:11 AM #2
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Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I said it back a while ago, the whole oil thing is a bubble!  My market is moving very very fast right now.  We are finding ourselves in multiple offer situations once a buyer will commit.  How exciting is that?

Aug 17, 2008 05:00 AM #3
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The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
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Renee,

That is very exciting.  We just had one where we had multiple offers on a listing and as a result received full price !  Felt like the old days.  I think we are in for a bit of surprise on the plus side in the next 12 months.  The media will be ashamed of themselves !

Aug 17, 2008 12:50 PM #4
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Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island

I've been saying for a while now that people are going to miss out on opportunities while waiting for the media to say that it's ok to jump back in the pool.  They using lagging indicators, so the recovery could have already started by the time that people realize it.

Aug 17, 2008 09:58 PM #5
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The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
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Adam,

Great point.  The way I refer to it is that the people waiting for the "bottom" will be too late for them.  By that time, home values might be up 10 to 15 percent !  Then they lose their negotiating edge as they are competing with more buyers and so forth.  The opportunity is right there, right now !

The Somers Team

 

Aug 17, 2008 11:33 PM #6
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