IT'S A CLOUDY DAY IN VENICE, FLORIDA
HIGH AROUND 80 DEGREES
The National Association of Realtors met last weekend in San Diego, California with the big question on everyone' s mind; "When will we return to a stabilized market?"
The National Association of Realtors' chief economist, Lawrence Yun, Ph.D, predicts the market should stabilize in 2010. He believes with the extension on the tax credit it should bring in between 2.3 and 2.4 Million first home buyers. The question on my mind is what about the 10% unemployment rate? What about the foreclosures?
Yun thinks that people that have jobs will not wait to purchase a home because they want their tax credits. With the government giving an $8,000 tax credit, why wouldn't people use that towards a down payment? With an abundance of homes priced below $200,000 it is now more affordable for people to purchase their first home or a vacation home.
Foreclosures are all over the MLS. However, foreclosed homes do not sit on the market long. Yun believes that there will not be a second wave of foreclosures. I disagree with him. Working with Asset Management Companies I speak to a lot of people whose homes are being foreclosed. Some people tell me they stopped paying their mortgages over two and a half years ago. Whit that being said, I believe that we will see another wave of foreclosures, not nearly as large as the first.
Buyers are aware of properties that are being foreclosed upon from foreclosure websites before they are even listed. Investors see the value in foreclosures and want to be first in line to put an offer in as soon as they hit the market. Foreclosed properties that I have listed usually have multiple offers within the first week. Banks don't usually come down too much from the list price. We need for this fast absorption rate to continue in order for us to clear the market of the abundance of foreclosures.
Yun believes we will have 3 million foreclosures this year and 3 million next year. Hopefully we will see the fast absorption rate continue on foreclosures. This will help the market stabilize and return to a more "normal" market.
In closing, the market will start to stabilize; however, I believe that it will take at least until the end of 2010 into the beginning of 2011. After we weather the flood of foreclosures home owners should start to see their property values increase.
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VENICE, FLORIDA, 34285
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