The Return of Optimism

In spite of the main-stream media's obsession with only negative news, and I'm not denying there is a lot of negative out there, I'm seeing some positive signs that recovery is on the horizon.  I'm of the opinion that most Americans can only stand so much negative imput before they are hungry for some optimism. 

At the risk of being called a Polyanna, there are reasons to be optimistic.  Several studies recently released give me plenty of positive vibes.

Pent-Up Demand

The operator of Realtor.com, Move, Inc. published a study on March 23, with several statistics showing that "first-time buyers are optimistic."   In spite of the challenges of today's real estate market, 18.1% of first-time homebuyers plan to buy a home this year with the main reason being the $8,000 first-time homebuyers tax credit. The 3-year downturn in housing has created significant demand for homeownership.  Half of all Americans are paying more attention to housing costs than they they did last year.

Homeowners are working hard to reduce their expenses to make their mortgage payments, 72% have reduced discretionary spending, and 19% plan to take advantage of theadministration's new program to refinance or get a loan modification.

Stabilizing Markets

An Inman News study of Realtors' opinions of their markets shows that 3 out of 4 participants think their market is stabilizing or improving.  Only 13% said their market was getting worse, and credited the uncertainty of the economy as the reason.  The respondents who see improvement say they've seen the change within the last month.  These opinions from people 'in the field' will not be proven until the statistical analysis can be made after the fact, which probably won't be until we see 2nd quarter statistics. 

NAR is predicting sales of previously owned homes to be 1% higher this year.  (Granted, NAR is always more optimistic than realistic.)  The Mortgage Bankers Association predicts that number to decline 2.5% from 2008 numbers. 

Economic Recovery on the Horizon

Many believe that the housing industry led us into the recession, and the housing industry will lead us out.  According to Bank of America's chief executive officer Ken Lewis, the economy is "close to the bottom,"  with a recovery in the beginning of 2010.  His evidence?  Mixed signals.  Housing is seeing improvements, and car sales were not as bad as expected.  The recent wave of refinancing has reduced mortgage payments for many homeowners and will help the economy.  Some economists don't believe we'll see the bottom until 2010, with recovery the year after. 

Optimism is a powerful force, if it's grounded in reality.  The reality of America's resources and people is always something to be optimistic about.

                            The Highland Real Estate Group                      
           Chris & Karen Highland * Frederick County MD Real Estate Agents
                                 Specializing in Frederick County Real Estate 
                                                  301-831-9947
                                            Real Estate Teams, LLC
                                              isell4u2@msn.com