The National Association of Estate Agents (NAEA) has noted that there has been an increase in buyers and sellers in the market for houses. This number is independent of actual houses sold. Does this mean that more buyers are stepping in to buy a house and that the inventory of unsold homes is starting to fall?
There are some very interesting numbers I want to share with you before I give you my answer on the question is 2009 the time to buy a house. First time home buyers were responsible for 11% of all home sales for the first half of 2009. The selling price of homes in certain areas rose last month. Real estate agents report that the number of people looking for a home to buy rose from 170 to 203. The number of sales per agent also rose from 8 to 9.
Everyone is now wondering if 2009 is the year to buy a house. In a recent survey of more than 55 real estate analysts, 60% believe that 2009 is the year to buy a house. Probably the single most important factor to look at when speaking about home sales is interest rates. The 60% of analysts who believe now is a good time to buy a house also believe that interest rates will not be raised until sometime in 2010. It is both low prices and low interest rates (borrowing rates) that will pull more buyers into the housing market.
40% of industry analysts surveyed feel that it is too early to buy a house. They believe that the price of houses will continue to drop. The reason they give is that unemployment will continue to remain high. Even more workers will worry about job security. The banks will continue to reduce credit lines and make fewer home loans. Capital Economics forecasts home prices to fall another 20% before a bottom is reached in late 2009 and early 2010. A small amount of extreme analysts expect home prices to fall all of 2009, 2010, 2011, 2012, 2013 and finally bottom in 2014.
Now that I have given you the data, I am going to give you my opinion. I do not think you should hurry to buy a house. The economy continues to be in a recession. Unemployment continues to rise. Banks continue to lower credit lines and make fewer home loans. Homeowners continue to go into default at an increasing rate as ARM loans mature. All of this means that the demand for homes will be very low for some time.
Perception has also changed about real estate. The old cliche that home prices have never dropped by more than 10% in the history of the United States has now been thrown out the window. Houses use to be considered a relatively safe investment as opposed to the volatile stock market. That perception in the market place has forever changed. It is my opinion that even better deals await home buyers in 2010.
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