Forecast for Colorado? BETTER!
April 10, 2009
The National Association of REALTORS® (NAR) Chief Economist, Lawrence Yun spoke to the Summit Association of REALTORS® at their weekly breakfast meeting. Yun is Managing Director of Quantitative Research at the NAR, where he manages the Statistics and Forecasting Groups of the Research Division. He writes regular columns on real estate market trends, creates NAR’s forecasts, and participates in many economic forecasting panels, including Blue Chip and Harvard University Industrial Economist Council. Dr. Yun has been quoted on the real estate market and the economy in the mass media, including the Wall Street Journal, the New York Times, and the Washington Post. He has also appeared on CNBC and Bloomberg TV. Dr. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.
This week, in his address to REALTORS® right here in Summit County, Yun mentioned that the trend, and his forecast for Colorado is BETTER than that for the rest of the nation. He stated that Buyers can position themselves very well if they purchase before inflation escalates, and if they are able to take advantage of the first time homebuyer tax credit. Mr. Yun quoted a statistic that 30 million would-be buyers are currently living with family and friends as a result of the market crisis, that these people will be the first to benefit from record low lending rates and lowered property values in recovering markets.
The hardest-hit housing markets — Florida’s Gulf Coast, California’s Inland Empire, and Las Vegas, among others — experienced a more than 80 percent jump in home sales during the year-over-year period ended in February. In Cape Coral, Fla., which had the highest foreclosure rate in the nation in 2008, there are even bidding wars. Experts say bargain foreclosures, low interest rates, and the $8,000 federal tax credit are helping first-time buyers and investors. These buyers also have an advantage because they do not have to sell a current home to close the deal. However, experts note that the housing market will not recover until banks loosen their lending standards; and these markets could experience another downturn if interest rates rise and the tax credits disappear. In comes the FHA…
The Federal Housing Administration (FHA) is a primary source of mortgage financing for millions of America’s families and plays a key role in helping bring stability to the housing market. The following is from the message that the National Association of Realtors® delivered to the Senate Appropriations Subcommittee last week.
“Without FHA financing, families would be unable to purchase homes and communities would suffer from continued foreclosures and blight,” said Lennox Scott, a member of NAR’s Real Estate Advisory Board and CEO of John L. Scott Real Estate in Bellevue, Washington. In his testimony, Scott shared NAR’s belief in the importance of FHA and concern for the safety and soundness of its programs due to its dramatic growth over a short period of time.
“We believe that FHA has done a good job stepping up to today’s market challenges. However, along with the dramatic growth in market share comes greater responsibility and the need for increased infrastructure and staff,” Scott said. Over the past 18 months, FHA has handled an increase in volume four times greater than 2007 levels, increasing its market share to over 30 percent.
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“The U.S. Department of Housing and Urban Development has made a number of important and valuable changes to FHA over the years that has enabled it to stand up to the challenges of today’s mortgage market,” Scott said. “FHA is now a principal source of financing for millions of America’s families, and without it, the economic crisis would be significantly prolonged. This is why it is so important to invest in FHA improvements and advancements.”
NAR pledged to continue to work for FHA reforms that will ensure the continued success, availability and safety of FHA mortgage insurance programs.
Statistics point toward this being the “bottom” of this market, although nobody knows for sure. The best tactic for a Buyer is to access the resources of the NAR, his or her state association or local association of Relators. REALTORS® are best equipped to advise on how best to buy in today’s market. Let us know how we can help you!