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Real Estate Outlook: Obama Effect
For example, the bellwether poll of consumer confidence -- conducted by the University of Michigan -- has just come out and it found consumer sentiment up by two percent in January over December. The component of the index that's based on "expectations" -- do you expect the economy will start improving? -- was up by three percent.
Now you can argue that January's bounce had nothing to do with the arrival of a new president and economic team in Washington, and was barely a notch over December's number. But the fact is: the arrow pointed up not down. Given the country's high expectations about the new administration, documented in every major poll on the subject, higher consumer confidence shouldn't be all that surprising.
Also, the massive economic relief package coming from Capitol Hill within weeks is virtually guaranteed to create jobs, and put more money into millions of households' pockets through tax breaks. You can argue that the stimulus package cannot possibly work its magic quickly enough to alter the course of the recession.
That's debatable and the full story won't be known for a year or more. But for housing, there's no question that a tax credit with teeth, nonrepayable and with a use-it-or-lose-it deadline, can only spur additional sales, maybe several hundred thousand over the course of the coming 12 months, according to some housing group estimates.
Meanwhile mortgage rates remain under five percent -- at least for applicants with solid credit and a downpayment. Inflation is close to zero: the CPI urban index dropped by seven tenths of a percent in December, and the energy index was down by eight point three percent.
Finally, the latest data from southern California --the epicenter of boom and bust -- confirms that market by market, there are signs of rising home sales as affordability improves. According to MDA DataQuick, southern California sales last month were up by fifty point five percent over a year earlier. The flip side of that improvement: prices were down thirty-four point six percent.
Doomsayers may not be impressed by sales turnarounds, but anyone who sells -- or buys real estate and is looking for a great price -- can't afford to ignore positive signs.
Written by Kenneth R. Harney
January 27, 2009
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We stay away from relating anything to political affiliation and who is in office and what happened due to what....what we DO know is that there seems to be a wave of optimism....and that is bringing buyers to the forefront....and that is good thing.
Patricia - I think that the answer really is 6 - 12 months out in the future. Will this euphoria last? Will this stimulus bill really have a positive effect, or will it be the same as the New Deal programs which spent a lot of money but had little or no positive results.
Good post. I understand this, and you understand this, but why don't the buyers understand this. If you are getting a historically low rate, a extremely competitive price, and with the way things are a Realtor that will bend over backward for you, why wouldn't you take advantage of this opportunity. Hopefully by mid March will see some true turn around statistics.
Let's all hope for any encouraging signs for the industry. If Real Estate turns around a bit, the economy should follow. This is the first recession we've ever had caused by real estate.
At least for me I'm getting a good flurry of new business. This is at least something better than the last quarter of 2008.
Here in Cape Coral, Florida the Waterfront Homes Real Estate Market is trying to recover. The biggest impediment is not interest rates but rather the unwillingness of banks to make jumbo loans under ANY circumstances. In the REO market, cash buyers dominate the scene, only because individuals cannot get loans for $50,000. to $100,000. Consumer sentiment seems to be improving, as measured by the number of prospects coming to the office. BANK SENTIMENT does not seem to be improving.
JimG
To All, We are also showing a lot of calls and contracts. We are in attorney review on 3 of our listings, nice #s too. 2.5m, 1.5m & 800k all look good.