With all of the negative speculation on today’s housing market, it’s extremely difficult for condo buyers and sellers to stay positive and look at the “Big Picture”.The majority of society would prefer to sulk in the negative aspects in life regardless of what it pertains to…..Why do you think the media is 85% geared towards death, theft, scandals, and Paris Hilton???Why, because a newspaper with a good Samaritan story on the front cover won’t sell.It’s that simple.So let’s take a moment to look at the housing market “Big Picture” and really break it down.
There are several factors supporting our market, one being historically low mortgage interest rates.The 30-year fixed-rate mortgage is estimated to average 6.7 percent during the second half of this year, and fluctuate around 6.6 percent in 2008.Second factor, our unemployment rate is nothing like it was during the last housing recession in the mid 90’s.According to Lawrence Yun, NAR senior economist, with the National Association of Realtors, “the unemployment rate is likely to average 4.6 percent in 2007, unchanged from last year.”He also mentioned, “Inflation, as measured by the Consumer Price Index, is projected at 2.6 percent in 2007, down from 3.2 percent last year. Inflation-adjusted disposable personal income should rise 3.0 percent this year, up from a 2.6 percent gain in 2006.” Each of these viable attributes played an enormous part in the down-whirl spiral of the market in the last recession.They simply don’t exist today.
Lastly, there’s the concern focused on the amount of available inventory in the larger markets. Buyers now have an overwhelming advantage given the wide selection of homes available in many markets, but with profit margins coming under pressure, homebuilders will limit new construction well into 2008. In San Diego we have already noticed new home builders placing their new developments on hold, intelligently waiting for their competing available inventory to be absorbed…. Sounds like a smart move to me.
Keeping in mind the influences mentioned above, it should be easier for you to consider the “Big Picture” when placing your opinion of today’s housing market. For buyers looking for a long term investment, this is the market you should be purchasing in. A few things to keep in mind the next time you see the media do what they do best…..