Real Estate – A Positive View for 2008!

In the world of real estate, 2007 was a wild ride! Home values fell, mortgage rates were extremely volatile and lenders became much more cautious on approvals.

So what can we expect in 2008? To be certain, who knows? But three things are clear:

1)      Homes are much more affordable.

2)      It’s a buyer’s market.

3)      Rates are historically low. Consider the chart below.

On a local scale, I feel we are at, or nearing the bottom, of this downward slope. That may be a bold statement, and I’m prepared to “eat those words” later on if I must; however, here are a few more reasons I feel things should improve in 2008.

We are in a beautiful area. People want to live here.

EFFECT: Those with the means should begin to notice the many relative home bargains. This in turn should bring back some demand and help push home values up again. (If I was a Realtor, I would be advertising in out-of-town markets.)

Rents have been holding steady and even increasing.

EFFECT: Now, with about 25% down, an investor can purchase a home and break even or even profit a little from rent vs. payment, taxes and insurance. This should attract more long-term real estate investors hoping to cash in on future equity.  Soon, potential homebuyers will realize they can buy and make the same or lower payment than rent would cost them.       

Great first-time homebuyer incentives.
EFFECT: Currently there are a number of programs offering down payment assistance, low rates and lenient credit standards for first-time buyers. Even individuals who have filed for Bankruptcy or have tarnished credit can get this help. More of those with the means to purchase should choose the tax and equity benefits of owning one of the many now affordable homes over the high cost of renting.

Perception is everything and I believe the majority of the media has created a self-fulfilling prophecy to their and our own detriment! Consider: Three years ago the media would have you believe home equities would never stop increasing and buyers were literally lined up with competing offers on overpriced homes. Today, with rates and home prices both low, right now is a much better time to buy than two years past, but the media is determined to scare everyone away! Go figure?

SO IN 2008, IF YOU WANT TO SEE THINGS IMPROVE, HELP SPREAD SOME OF THIS POSITIVE NEWS!

 

© 2007 Charles Motley. All rights reserved.

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