Real estate is on target to rebound this year
Dr. Lawrence Yun’s NAR Economist Power Point presentation
Many potential buyers have been sitting on the sidelines, waiting for housing prices to either drop lower or show signs of recovery.
Now, experts are saying that the housing market is finally bottoming out, so now is the time to buy in Colorado.
Dr. Lawrence Yun, the chief economist of The National Association of Realtors (NAR), asserts that the national housing market is on its way up. The housing market in California — one of the states that suffered drastically from the mortgage crisis — is experiencing a strong rebound, and the economic stimulus package (including low interest rates) is enticing people to buy homes again, he said on April 8, when he spoke to Summit County Realtors, locals and builders.
Perhaps the most exciting news is that Yun expects Colorado to head the real estate market’s recovery. He said Colorado is a “key growing market†with an “extremely bright†future.
He projects that the number of home sales may climb 10-20 percent during the last six months of 2009. And with more homes listed on the market this spring, summer is a great time to buy in Summit County.
Yun said the driving force of Colorado real estate rebound has to do with projected population growth: The state is still on target to grow significantly in population, and more people means a greater demand for more homes.
Equally encouraging is the fact that despite unemployment rates, there are still plenty of people with money, just waiting to buy homes. But when buyers don’t act, instead wondering if prices or interest rates will drop more, they impact the market negatively by contributing to a sluggish economy, Yun said.
To help jumpstart the real estate market, the NAR is actively supporting policies that buy down interest rates, maintain low fixed rates and decrease the cost for refinancing. They also want loan limits to reach up to 125 percent of median home prices.
Second-homeowners fuel Summit County’s real estate market, but second-home sales slowed when bank loans became much more difficult to secure. Yun hopes the government will improve the availability of loans by purchasing jumbo loans.
Looking into the long-term, Yun believes second homes in Summit County will continue to sell and increase in price, partially due to active Baby Boomers who want to retire in the mountains. In addition, as Baby Boomers’ wealth transfers to the next generation, a younger population will have extra money to invest in vacation homes.
New homes
Contractors have pretty much stopped building homes on spec these days, so building in Summit County has declined. Yun said the large inventory of homes on the market will prevent builders from constructing new homes for another year or so. In addition, banks just aren’t loaning money for spec homes right now.
However, he said in the long run, a growing population will demand that new Breckenridge homes be built.
In the meantime, many homeowners are taking advantage of tax credits and incentives to hire contractors to upgrade their homes to be more energy-efficient.
And, on the large-scale development front, Summit County is faring much better than Pitkin County, home to Aspen. Developers have abandoned planned projects in Snowmass Village, even leaving buildings half finished, because they can’t find financing.
In Breckenridge, One Ski Hill Place, which is under construction right now, is still on track to reach completion next year, said Kelly Ladyga, a spokesperson for Vail Resorts. However, the resort is waiting to see how the economy does before it starts building a new hotel at the base of Keystone’s River Run gondola.
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With the market crisis, people are looking to get more bang for their buck. Ajijic has become one of the largest retirement communities for Americans and Canadians in the world, and is rated as having within the top 5 best climates in the world. I am always looking for referral exchanges, so to all agents, if you have yet to hear about Ajijic, it is deffinately worth checking out!
livinglakechapala.com
I’m a Realtor in Bellingham Washington. For the last 6 weeks, pending sales in the Bellingham market have been up slightly over the same week of the prior year. It’s only been up by 5 to 10 units but up none the less. This has not happened for at least 18 months. I wish I could say that the increases were due to overall consumer confidence but I don’t think that is the case. We are seeing first time home Buyers jump in because of the interest rates & the $8000 tax credit from the stimulus package. At the other end, investors are taking advantage of other people’s misery & buying up REO’s & short sales.
We’ll know full well when we have hit bottom because that’s when the average Joe is going to get off the fence & decide that it’s safe to open up his wallet & venture out again.