Looking at today's real estate news, one cannot help but get a feeling that no one really knows what is going on. For instance, NAR's "Realtor Magazine Online" says in one article:
"Greenspan Says the Worst is Over for Housing
Former Federal Reserve Chairman Alan Greenspan says that the worst of the housing adjustment is over and “sales figures have stabilized.”... " (For the full text, go to http://www.realtor.org/rmodaily.nsf/pages/News2006112904)
Going further on the same website, we read:
"Fed Chief Bernanke Sees Housing Still at Risk
The biggest risk facing the economy right now is the flat housing market, Federal Reserve Chairman Ben Bernanke said in a Nov. 28 speech to the National Italian American Foundation.... " (Go to www.realtor.org/rmodaily.nsf/pages/News2006112905)
Interesting comments that, on the surface, appear to contradict each other. Granted, there are subtle nuances that could be discerned to not be contradictory, but the general tone of Mr. Greenspan is obviously optimistic, while Mr. Bernanke is guarded, if not overtly pessimistic.
Earlier on the website, we read:
"Home Owner Equity Just Fine, Says ULI Report
Although housing could stay flat in the coming year, equity losses aren’t in the cards for a majority of home owners, says Emerging Trends in Real Estate 2007, an annual outlook... " (Go to www.realtor.org/rmodaily.nsf/pages/News2006112903)"
This news item seems to paint a picture of a market that is flat and stable.
In yesterday's (11-28-2006) Realty Times website, we find this article:
"A Time For Yellow Flags
by Peter G. Miller
Figures from the National Association of Realtors show that the market has done fairly well. Of 148 metro areas, 102 showed year-to-year price gains, 45 were down and one was unchanged.
Twenty-one metro markets actually showed doubled digit price increases. Overall, prices nationwide dipped 1.2 percent to $224,900 from $227,600 a year earlier. As to sales, they're down 12.7 percent when compared to the third quarter of 2005, but 2005 was an amazing year. ..." (Go to realtytimes.com/rtcpages/20061128_yellowflags.htm )
This article indicates a market where prices are still increasing, but not at the pace of the past, but sales volume is down from a year ago.
Interesting views and different interpretations of the same real estate market, don't you think?
Here locally in the Harrisonburg/Rockingham County area, things are still static, to say the least. On a day to day basis, the number of "New Listings" seem to run about three to four times the number of "Solds," and, as a result, inventory is building. Sellers seem to be coming around to the realization that they aren't going to be able to realize the profit selling their house that their neighbors made last year, and are modifying their selling expectations accordingly. As before, Selling Prices run within ten percent of Listing Prices, so properly priced homes are still selling, and prices are still moving up, but not at the torrid pace of last year. Buyers, on the other hand, are shopping around and not making any speedy, rash buying decisions. For the most part, they seem to be "setting on their hands" and not "bidding" on properties unless they know beyond a shadow of doubt that the property is a bargain, that they have the means to buy the property, and that their future income picture is stable enough to ensure they can continue to afford what they are contemplating buying.
However, I believe that there is a pent up demand building that will soon have to be satisfied. Unemployment is down, employers are expanding their facilities, local governments are deciding to build schools and roads (Just today, the Rockingham County School Board voted to build a new school in the Elkton area, and Page County recently voted to build two new high schools), and new subdivisions are being proposed and approved (Today's Daily News Record reports a 500 home development is being proposed for Luray in Page County). All the elements of a lively real estate market are there; it's just that something has to supply the impetus to get people to buy.
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