With the real estate market in the state that it is in today, many people are finding it more and more difficult to be optimistic. With the constant media reminders of the economic crisis we are amidst, it is difficult for the public not to be pessimistic. In order to gain a better insight on the state of our current economy, as far as the real estate market is concerned, investors have to ask themselves some really important questions in order to get a true estimate of where it is at.
One of these questions is just how accurate is the market? How the market is portrayed in the media may be far different than what state it is actually in. Most of the information that is relayed by the media is often of a generalized nature. In order to offer a better perspective, this information needs to be specific to each area. Each state has different inventory that is available for sale. Also, whose perspective it is being reported from can also skew the way it is observed. Individual real estate agents, the real estate industry, and investors all have different views on the same topic because they deal with different areas of the market.
Another question that becomes apparent is Market trends are always changing and that is why they are aptly labeled so. But who dictates these trends? Is it the federal law makers, each individual state, or the investors within each respective community? The answer is all of the above. The truth is that the economy cannot be completely defined by one group of individuals. They all take part in the formulation of housing market trends.
One fact that is apparent, no matter who you ask, is that it is definitely a buyers' market right now. The home building industry has been declining and building permits for future construction are also down. In addition, housing starts were up only about half a percent. Home builders are still continuing to build homes but just at a more reserved pace.
This may just be a blessing in disguise for those who wish to take advantage of the current real estate market. Less starts and permits being issued coupled with a steady pace of modest construction may be just the way to stabilizing the economic state of the housing industry. There is no reason to build new homes when there are already so many on the market that have yet to sell.
The slowing construction has both the benefit of now creating any unnecessary inventory that will not sell and also the effect of maintaining the positions of those individuals who are employed in the construction industry. With employment rates hitting a staggering low, opting to completely shut down the building of new units would devastate both workers in the construction industry and the economy as a whole.
On another note, the eight thousand dollar tax credit offered to first time home buyers and was incorporated as an economic stimulus plan last year clearly affected the real estate market in a positive way. The incorporation of this program was a great contributor to the country's economic growth last year. In fact, single family home sales wend down almost four percent after the eight thousand dollar tax credit had ended in November. This was probably one of the main reasons as to why it was extended to be offered until the end of April of this year.
The extension of the eight thousand dollar tax credit to first time home buyers with the addition of the six thousand five hundred dollar tax credit to home buyers who have not purchased a home within three years has been a catalyst for the many more home buyers. Based on the activities that were witnessed last year in the real estate arena, this year has even more progress to experience.
The mortgage market also has its role to play. It also has much to offer to new home buyers in regards to the interest rates that are currently being offered. Thirty year fixed rates are currently about five percent. Fifteen year rates are only about four and a half percent. The rates are so low that it would be silly not to take advantage of them by getting a first time loan or re-financing an already existing one.
The housing market is slowly beginning to show signs of improvement. There has definitely been progress in the real estate industry over the past few months and it will continue to grow. Even though this growth is expected to be slow, it is also predicted to be steady as we emerge from the economic downturn the market has recently experienced.
Baby boomers are also being predicted to come back to the real estate market in a big way over the next couple of years. According to panelists at the National Association of Home Builders (NAHB) for Boomers and Beyond 50+ Housing Symposium last year, there will be a greater number of home buyers that will become more active over the course of the near future. For this reason, the housing industry has been focusing on this target group.
All of these factors combined are what is going to lead to the natural progression and gradual improvement of the current housing market. The housing market is perfect for those willing to buy.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น