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My Notes from a Presentation by Lawrence Yun, Chief Economist for NAR

By
Real Estate Agent with Crye-Leike

I just got back from the Crye-Leike Fall Conference, where we were fortunate to have as one of our keynote speakers, Lawrence Yun, the Chief Economist for the National Association of Realtors.

Following are some of my notes from his presentation:

  • Normal unemployment is 5%, we are currently at 6%. While we could top out at 7%, he feels it is doubtful.
  • The national housing market will start rebounding soon (some areas have already begun). However, we will not see the '05 or '06 frenzy anytime soon . . . there was too much speculative buying during that time.
  • As the rebound happens, we will still have fewer buyers . . . however, they will be more qualified.
  • Certain parts of the country are already beginning to rebound: ID, CA, NV, AZ, VA, FL.
  • Areas that are still struggling are: AK, WY, MO, KY, IN, WV, WA.
  • In the very affordable parts of the country (TN & MS included), one would think that sales would be fine. However they are still down because of two primary reasons: tightening of credit and low buyer confidence (which is due primarily to negative media).
  • Washington is of the mind that to get the economy back on track, we must get the housing market back on track. Paulson asked that the currently tight loan requirements be loosened. The goal is to get the pendulum back to the meeting.
  • Nationally, prices are beginning to stabilize.
  • With regard to the First-Time Homebuyer Tax Credit: it can help unleash a chain reaction for the trade-up buyer. Also, even with the repayment requirement, it is still a great deal . . . because money today is always better than money tomorrow.
  • FHA loan market share has gone from less than 5% in 2005-2007 to a projection of 20% in 2008 and 27% in 2009.
  • Conventional loan products' default rate is consistently less than 5%.
  • Subprime products' default rate is consistently 10%+ and is currently about 20%.
  • There is neighborhood variation with regard to pricing stability. All real estate is local. Those neighborhoods in which buyers primarily used conforming loans, prices are remaining stable.
  • Inventory of homes for sale is beginning to shrink . . . this will lead to greater demand and will help prices stabilize.
  • The home price forecast from a survey of 800 economists is that nationally, housing prices will stabilize in the first half of 2009.
  • The dollar is beginning to strengthen compared to the Euro, which will help bring oil prices down.

 

 I hope you find this information useful. If you would like to discuss this, don't hesitate to give me a call.

 

Tracy Kirkley

 Crye-Leike Realtors

662-895-8300

 Olive Branch Homes for Sale

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