Home prices and the economy as a whole continues to decline, but the National Association of Estate Agents (NAEA) has noted that in recent months there has been a tiny increase in activity with potential buyers and sellers in the market, which may differ from the rates. Has there been an increase of those who try to purchase a home and the number of new properties in the market place?
First time home buyers, having walked away from the market for so long, have purchased 10.8% of houses sold. Furthermore, the average sales per agent has stabilized in recent months. In some areas, the price of houses has increased a little suggesting that prices may have bottomed. The amount of home hunters rose from 182 per real estate broker to 200 and the number of homes each agent was selling rose from 88 to 102. The number of average sales of each agent rose from 4 to 7.
Everyone is now wondering if 2009 is the year to buy a house. In a recent survey of more than 55 real estate analysts, 60% believe that 2009 is the year to buy a house. Probably the single most important factor to look at when speaking about home sales is interest rates. The 60% of analysts who believe now is a good time to buy a house also believe that interest rates will not be raised until sometime in 2010. It is both low prices and low interest rates (borrowing rates) that will pull more buyers into the housing market.
Of the analysts surveyed, 40% believe that it is too early to purchase a house because prices are likely to fall further. The main reason they give for home prices continuing to fall is that home prices are still high compared to wages. Also, the availability of credit continues to shrink. Some industry experts are predicting house prices to fall even in 2010. JP Morgan expects home prices to fall another 10% before reaching bottom. There is a very small percentage of analysts who think home prices will keep falling until 2014. All the analysts who think home prices will drop further site rising unemployment, a continuation of the credit crunch, and the negative consumer sentiment commonly caused by a recession.
Now that I have given you the data, I am going to give you my opinion. I do not think you should hurry to buy a house. The economy continues to be in a recession. Unemployment continues to rise. Banks continue to lower credit lines and make fewer home loans. Homeowners continue to go into default at an increasing rate as ARM loans mature. All of this means that the demand for homes will be very low for some time.
The idea that a house is a good investment continues to be called into question as house prices fall. The housing market currently favors very low prices and homes that are priced to match the market valuation will be sold quickly. There are good deals on homes in 2009, but one may find even better deals later in 2009 and into 2010.
May you find this article helpful. If you own property in Fresno California and are in need of a property management company visit Fresno property management. If you are a tenant looking for the lowest rent on apartments for rent in Fresno, visit apartments for rent in Fresno CA
Leave a comment