This posting was written a couple weeks ago. I was a little early on my New Years Day letter and wanted to post it again. Best wishes for a Happy New Year!
Yesterday was a big day at Allen Tate, Realtors. We had our semi-annual meeting with our consultant Steve Harney of Keeping Current Matters. Typically, I walk away depressed from the content Steve delivers. Yesterday was very different!
Steve will admit that he is not the worlds greatest speaker. However, he is the authority on the housing market. And he always brings the data to back it up.
Here are some take aways.
1. Home sales will increase! Below are the predictions from both the National Association of Realtors and Fannie Mae. Both predictions show increasing home sales through the end of 2012. This can be attributed to low interest rates plus an increase of consumer confidence. Indicators of the up tick are already being seen in Wall Street as money continues to flow into the US markets.
2. Increase in home SALES does not indicated immediate value increases. This shows a recent survey of value expectations from leading economists, banks, reporters, government, etc. What is interesting about this chart is that no one thinks that we have hit the very bottom in terms of price. Why? The banks and federal authorities have been keeping a lid on the number of foreclosured properties to release back to the market. They now have a good grip on how many to release at any one time so that it does not kill the market. More inventory is coming which in the supply and demand world equals lower prices. But, take heart that in the third quarter of 2012, the rise begins.
3. Mortgage Rates are expected to go UP! Pretty easy guess here. We have heard for the better part of the last year that rates are at record lows. This chart from the Mortgage Bankers Association confirms the expectations that rates will rise.
4. With Rates Rising and Prices low, now is the best time to buy! Do you know John Paulson? He is a hedge fund manager who earned $15 billion (Yes, billion with a B) shorting the mortgage market and betting the housing bubble was about to burst. He was right! Take a look at his comments below. On September 27, Paulson said that now is the time to buy, buy and buy some more. Guess what, Paulsen just purchased a 2 bedroom apartment on Fifth Avenue for $2.85 million.
“If you don’t own a home, buy one. If you own one home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”
– John Paulson 9/27/2010
Thanks Steve for sharing this great news!
New and Views on Real Estate in South Charlotte 