A few items from highly-visible economists have shown up in the last few days that might be of interest to real estate buyers.
Dean Maki, chief U.S. economist for Barclays Capital, said that increases in jobs, credit, and affordable homes will overcome impediments such as rising interest rates, and the expiration of the Federal stimulus program to push the housing market toward recovery.
“I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” says Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College.
“The underlying trend is turning positive,” says Bruce Kasman, chief economist at JPMorgan Chase & Co.
This is great news, right?
Of course, we all want housing to recover. The overall economy depends on it, this is clear, but even closer to home, we really want to see an end to the suffering of countless families who are losing their homes to foreclosure. Anyone who spends their days in the real world of real estate, like we do, can tell far too many first-hand, gut-wrenching stories about families in crisis, stories that will break your heart, and stories that we need to stop from being repeated so endlessly.
We need prices to creep up to the point where homeowners are going to start seeing some equity in their homes. For those who bought or re-financed at the peak of the market, this point is a long-way off, but there are plenty of homeowners for whom an increase in equity– or even a decrease in red ink– would provide a reason to keep making payments and stay in their homes.
Of course, it's going to take more than rising home prices alone to stem the tide of foreclosure suffering. Homeowners need actual income to make payments, no matter how much equity they might have or have not, and we'll need an overall economic recovery, or at least a movement in that direction, before income and jobs start flowing again. Clearly, an integral component of any economic recovery would have to be an upswing in housing prices, and we are in great need of economic movement in the upward direction.
Real estate buyers, however, see a different side of the picture. For the great number of first-time home-buyers who have been seeking the opportunity to find affordable homes, a recovery in housing prices means more suffering, not less. Lower and mid-range buyers are already seeing bidding wars on almost any desirable property, and buyers using financing to purchase are losing out to investors with cash on-hand. Any increase in price in the low and mid-range segments is going to make the situation worse.
In the upper tier of the market, and in our area that begins around 7 figures, the situation is completely different, at least for the moment.
Ever since the bottom fell out of the real estate market at large, the high-end market has been a bargain-hunter’s delight. Sellers often list properties at prices that would work for them, rather than prices that make their properties competitive in this uniquely soft luxury market, but then, months later, after seeing no viable offers, they end up lowering prices, and if they are lucky enough to find buyers, often the prices are far, far below where they had been originally listed. This trend has placed luxury buyers in the driver’s seat to a much greater extent than in any other market segment, but can it last?
For the last year we have heard numerous tales about big money sitting on the sidelines of the luxury real estate market, waiting for some reliable sign of a turnaround. If such a sign were to appear, would we have a feeding frenzy on our hands?
It's hard to imagine that we would see really big jumps in the average list price right away, because so there are already so many dreamers out there on the seller’s side, and, even in a recovery, it might take some time for reality to catch up with sellers' dreams. What we might, see, though, if volume does pick up, is an uptick in the average and median sale price, as luxury buyers begin to lose the overwhelming advantage they now enjoy.
We are not in the business of fortune-telling. Our clients are uniquely educated, informed, and savvy, and we would never presume to cheer-lead or blather on about what a great time it is to buy. What we do provide is assistance in thoughtful consideration and decision making on the part of real estate buyers, and we offer the highest level of expertise and service to buyers who are ready to make a move now. If this might be you, give us a call, and let’s talk.
(831) GET-HOME
(831) 438-4663
Santa Cruz Buyers’ Brokerage
www.santacruzbuyers.com
info@santacruzbuyers.com
Monterey Buyers' Brokerage
www.montereybuyers.com
abodes@me.com
dre 01872669
Dean Maki, chief U.S. economist for Barclays Capital, said that increases in jobs, credit, and affordable homes will overcome impediments such as rising interest rates, and the expiration of the Federal stimulus program to push the housing market toward recovery.
“I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” says Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College.
“The underlying trend is turning positive,” says Bruce Kasman, chief economist at JPMorgan Chase & Co.
This is great news, right?
Of course, we all want housing to recover. The overall economy depends on it, this is clear, but even closer to home, we really want to see an end to the suffering of countless families who are losing their homes to foreclosure. Anyone who spends their days in the real world of real estate, like we do, can tell far too many first-hand, gut-wrenching stories about families in crisis, stories that will break your heart, and stories that we need to stop from being repeated so endlessly.
We need prices to creep up to the point where homeowners are going to start seeing some equity in their homes. For those who bought or re-financed at the peak of the market, this point is a long-way off, but there are plenty of homeowners for whom an increase in equity– or even a decrease in red ink– would provide a reason to keep making payments and stay in their homes.
Of course, it's going to take more than rising home prices alone to stem the tide of foreclosure suffering. Homeowners need actual income to make payments, no matter how much equity they might have or have not, and we'll need an overall economic recovery, or at least a movement in that direction, before income and jobs start flowing again. Clearly, an integral component of any economic recovery would have to be an upswing in housing prices, and we are in great need of economic movement in the upward direction.
Real estate buyers, however, see a different side of the picture. For the great number of first-time home-buyers who have been seeking the opportunity to find affordable homes, a recovery in housing prices means more suffering, not less. Lower and mid-range buyers are already seeing bidding wars on almost any desirable property, and buyers using financing to purchase are losing out to investors with cash on-hand. Any increase in price in the low and mid-range segments is going to make the situation worse.
In the upper tier of the market, and in our area that begins around 7 figures, the situation is completely different, at least for the moment.
Ever since the bottom fell out of the real estate market at large, the high-end market has been a bargain-hunter’s delight. Sellers often list properties at prices that would work for them, rather than prices that make their properties competitive in this uniquely soft luxury market, but then, months later, after seeing no viable offers, they end up lowering prices, and if they are lucky enough to find buyers, often the prices are far, far below where they had been originally listed. This trend has placed luxury buyers in the driver’s seat to a much greater extent than in any other market segment, but can it last?
For the last year we have heard numerous tales about big money sitting on the sidelines of the luxury real estate market, waiting for some reliable sign of a turnaround. If such a sign were to appear, would we have a feeding frenzy on our hands?
It's hard to imagine that we would see really big jumps in the average list price right away, because so there are already so many dreamers out there on the seller’s side, and, even in a recovery, it might take some time for reality to catch up with sellers' dreams. What we might, see, though, if volume does pick up, is an uptick in the average and median sale price, as luxury buyers begin to lose the overwhelming advantage they now enjoy.
We are not in the business of fortune-telling. Our clients are uniquely educated, informed, and savvy, and we would never presume to cheer-lead or blather on about what a great time it is to buy. What we do provide is assistance in thoughtful consideration and decision making on the part of real estate buyers, and we offer the highest level of expertise and service to buyers who are ready to make a move now. If this might be you, give us a call, and let’s talk.
(831) GET-HOME
(831) 438-4663
Santa Cruz Buyers’ Brokerage
www.santacruzbuyers.com
info@santacruzbuyers.com
Monterey Buyers' Brokerage
www.montereybuyers.com
abodes@me.com
dre 01872669
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