STATE of the (real e) STATE Address

Real Estate Agent with RE/MAX Impact

2009 Looks Good!

Let's review 2008 first.  Residential sales totaled 18,302. That's down from 20,783 in 2007, a 11.decline.   Average sale price was also down.  Depending on your area and price range from as little as 2.9% to as much as 15%. 

Obviously, the higher price ranges and areas with a lot of foreclosures were hit the hardest.  Home sales are down 23.2% from 2005...the pinnacle year in central Ohio home sales.

That's the bad news.

Here's the good news.  Since the first of the year the real estate business has been on a tear!  MLS has just 11,494 homes currently listed.  That is fantastic news!  What I consider balanced is when listings are 50% of annual sales.  That is what we averaged for the years before and during the run up...24,000 annual sales and about 12,000 active listings.  We are currently at 62%.  That means we are still in a buyer's market, but it is not as bad as it was. 


Listing inventory will increase compared to sales, keeping us in a buyer's market.  Sales will increase 5% to 19,200.  Interest rates will hover between 4.5% and 5% for new purchases because the government will control the rates charged by Fannie Mae and Freddie Mac. 

The unrealistically low rates will drive some mortgage companies out of business, or at least to consolidate with other companies.  They will then be just a loan packager for Fannie or Freddie.   In the long run that means less competition, which means higher fees and rates.  The other scenario is the government will be the only lender.  Who thinks they will run a lean, efficient, cost effective company?

If you have been reading my blogs for the last year, you know that I believe this is the best time ever to buy a house.  We have a 2 year window where low prices and low rates can be had.  As we come out of this downturn, adjustment, market correction...whatever you call it, rates will gradually increase.  I'm guessing in the 7% to 8% range.  Prices will gradually a rate of 1%-2% a year, taking 15 years to reach the 2005 values. 

Taxes will be a serious problem for the 57% who pay taxes.  This bailout has to be paid for, not to mention Social Security will need bailed out soon.


The 4th quarter 2008 will be marked as the bottom of the housing crises.  The economy will slowly recover throughout the year.  2010 will show some more improvement, reaching a balanced residential real estate market in 2011 (when annual sales are double the active listings).  Commercial real estate will not see any relief in the next few years, possibly getting worse.    

Everyone will need to figure out how they protect and grow their nest egg.  I think the very best way to do it is with single family rentals.

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