|
What's in Store for Real Estate in 2009?
Posted: June 1, 2009
With all the headlines talking about the deepening recession, many people might think that real estate in 2009 will do no better than 2008.
Greg Herder, a real estate marketing expert and trend watcher that I respect, sees lots of positive signs that the real estate cycle will start trending upward in 2009. Mortgage rates are close to 50-year lows at 5% or even 4.75% for 30-year mortgages. An expected massive economic stimulus package from the incoming administration suggests the downward cycle will turn into a slow rebound over the coming several quarters.
Herder points out that most economists are predicting that housing prices will stabilize and/or rise in 2009. A boom in the mortgage market (including re-fis and home purchases at new affordable prices), will pump money into our economy. The latest monthly Federal Housing Finance Agency index found home prices UP by six-tenths of a percent in the Mountain states and UP by two-tenths of a percent in New England- these small signs are strong indicators that the down cycle is coming to an end.
I believe the low rates, low prices and stabilizing local markets make 2009 a great time to buy or move up in real estate. Buyers who choose to wait until prices come down more are also gambling that rates will hold steady or drop. Even a 10% drop in home prices is immediately nullified by a mere 1%increase in interest rates on a 30 year mortgage.
Falling home values can be a great time to consider trading up to a bigger home. Even though your home sale price may be lower, the smaller loss can be compensated by greater savings at purchase. If home prices drop 5% for example:
Old Home Price = $200,000 Sell at $190,000 = $10,000 less
New Home Price = $400,000 Buy at $380,000 = $20,000 saving (Source: Realtor Magazine)
Check back often for my updates on the real estate market and my take on what Obama's proposed stimulus package will have on the real estate market.
Rhonda Formby |
Only one place in the country could match the energy of Rhonda Formby. That’s Nashville. With its exciting blend of Southern tradition and modern technology, thriving cultural life and natural beauty, it’s a place with a rhythm all its own. Although known for its music scene, ask anyone who calls this place home and they’ll agree Greater Nashville offers a progressive and dynamic economy with countless opportunities for outdoor adventure. With her friendly style and focus on listening, Rhonda Formby helps you to explore your many options in today's complex real estate market. “My Goal is to exceed my clients’ expectations. Making certain their experience is pleasant and rewarding is my ultimate priority.” As a dynamic business professional, she is right in tune with Nashville’s countless opportunities.