Balanced Real Estate Information

• Both the CME & the economist Zandi are predicting a decline in most major markets.

1. Fantastic! Did either of these groups predict the run up in the real estate market? That is not mentioned.
2. Real estate is slow to rise and slow to fall. This has been the stable of investment that real estate has been for decades.
3. The CME is predicting that the real estate market will fall as a result of option trading. These are the same groups of people who probably also owned World Com stock as well as Enron. Let's take that for what it is.
4. Zandi is predicting the fall as a result of job market data, mortgage applications, & new housing. No offense to Zandi but Alan Greenspan came out and said the worst is over for real estate just last week. Alan Greenspan has far more experience than Zandi.

• If home prices decline & interest rates rise properties will cost buyers more on a monthly basis then if they purchased now.

1. Without trying to sound like a car dealership forcing someone into a car they can't afford it is the monthly payment that affects buyers the most.
2. If buyers are paying more per month for a home that is what is going to affect their pocket book not the total price of the home. That is the great part about financing.
3. Buyers should take the opportunity now to take advantage of historically low rates and some willingness buy sellers to negotiate better deals.

• Supply of homes is not mentioned by either one

1. A leading indicator for the real estate market is the supply of homes. The article fails to mention how either group addresses this issue. If prices are too fall then there must be an excess of inventory and a buyers market must exist. This is defined as over 12 months of inventory. Some states, because of land and other economic factors, are almost always a buyers market yet real estate is still bought and sold every day.

• How much did these two predictors loose when the stock market crashed & Are they selling their homes?

1. We find it hilarious that all but 1 economist in Southern California have been predicting the fall for years but still owned. We say put your money where your mouth is. If you say a market is going to fall you better sell off any real estate you own. So let's see who sells what.

We can say this. If we honestly believed the housing market here would fall or anywhere wouldn't we just sell? Take that as food for thought.

You be the judge of the real estate market!

This blog will be written about the article on MSNBC.com that comes from business week. The author is Pallavi Gogoi and can be found at www.msnbc.msn.com/id/15223373.

Labels: buying a home, first home, home prices, House market, house values, values of homes

# posted by James Bridges @ 12:01 PM