Information, advice and news about finding luxury homes in Scottsdale, Arizona. Please contact us at (480) 595-6412 for a free consultation today!

Luxury Valley Homes - Scottsdale, AZ Real Estate Blog

(No Ratings Yet)

 Loading ...

[?]

Despite all the gloom and doom reported in the mortgage market for the past year, America’s largest trade association says that conditions are “improving” for consumers. In his October 2007 forecast. The National Association of REALTORS (NAR) senior economist, Lawrence Yun, predicted that widening credit availability will help turn around home sales.

“Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August 2007 credit crunch, and FHA loans are replacing subprime mortgages,” he said

Yun also said it’s important to place the current housing market in perspective, pointing out that 2007 was the fifth highest year on record for existing homes sales. He noted that, although sales were off from an ‘unsustainable peak” in 2006, a historically high level of home sales took place in 2007. One out of 16 American households bought homes in 2007.

“The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains,” Yun said. He emphasized all real estate is local with naturally large variations within a given area. “Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well in 2008,” Yun said. “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.

Existing home sales were expected to total 5.78 million in 2007 and then rise to 6.12 million this year, in contrast with 6.48 million in 2005, down from 1.05 million in 2006.

“A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices,” Yun. Housing starts, including multifamily units, are likely to total 1.24 million this year, down from 1.8 million in 2006.

At the time of this writing Yun projected that existing home prices would probably slip 1.3% to median of $219,000 in 2007 before rising 1.3% to $221,880 in 2008. The median new-home price was calculated to drop 2.1% to $241,400 in 2007 and then increase 1% to 2008 to $243,900.

The NAR forecast also noted:

• The 30 year fixed-rate mortgage is expected to edge up to the 6.6% range in the second half of 2008. Additional cuts expected in the Fed funds rate will help to keep mortgage interest rates historically favorable.
• The U.S. gross domestic product (GDP) is likely to grown 2.7% this year.
• The unemployment rate was forecast to average 4.6% in 2007, unchanged from 2006. Inflation, as measured by the Consumer Price Index, was expected to be 2.8% in 2007, compared with 3.2% in 2006.

It’s worth repeating what Yun and other industry experts have always maintained: Real estate is local.

As your local real estate experts, we can provide you with the most up-to-date information about your area-including the latest statistics by neighborhood-and help you decide if the time is right for you to buy sell or stay put.

Leave a Reply