Expert sees no imminent housing bust or crash
Here are some positive comments about the real estate market. Read the entire article here.
Here are some highlights from the article:
Donald L. Kohn, the Federal Reserve's vice chairman, sees no imminent bust or crash in housing at all. It is a "correction" that's under way -- a cyclical rebalancing of a marketplace that got too hot for too long in some parts of the country, and is now heading back toward more "normal" conditions, where prices are more in line with what consumers can afford.
"The reported declines in house prices in a number of areas should help to facilitate the rebalancing of supply and demand in those markets," said Kohn. Not all home sellers have fully grasped the altered realities in their own local markets -- that they've got to reduce their asking prices if they truly want to sell -- so the process is still unfolding. Re-priced houses, in turn, should stimulate greater numbers of potential buyers to get off the sidelines and make offers.
Doug Duncan, chief economist of the Mortgage Bankers Association, points out that national housing sales numbers are merely rolling back to 2003 levels -- "and that was a record year." Serious sellers and buyers shouldn't be misled by predictions of imminent crashes, said Duncan. Not only do the doom reports ignore the positives out there in the marketplace -- mortgage rates in particular -- but "the rhetoric is just way overwrought."
Here are some highlights from the article:
Donald L. Kohn, the Federal Reserve's vice chairman, sees no imminent bust or crash in housing at all. It is a "correction" that's under way -- a cyclical rebalancing of a marketplace that got too hot for too long in some parts of the country, and is now heading back toward more "normal" conditions, where prices are more in line with what consumers can afford.
"The reported declines in house prices in a number of areas should help to facilitate the rebalancing of supply and demand in those markets," said Kohn. Not all home sellers have fully grasped the altered realities in their own local markets -- that they've got to reduce their asking prices if they truly want to sell -- so the process is still unfolding. Re-priced houses, in turn, should stimulate greater numbers of potential buyers to get off the sidelines and make offers.
Doug Duncan, chief economist of the Mortgage Bankers Association, points out that national housing sales numbers are merely rolling back to 2003 levels -- "and that was a record year." Serious sellers and buyers shouldn't be misled by predictions of imminent crashes, said Duncan. Not only do the doom reports ignore the positives out there in the marketplace -- mortgage rates in particular -- but "the rhetoric is just way overwrought."
posted by Marc Rasmussen at
6:07 AM
2 Comments:
This so-called "expert" has his blinders on like many others in his profession.
The person on the street who has to go out and find the right house, obtain home insurance (if he/she can find it), and locate a reasonable mortgage is the person I tend to watch.
If you continue to quote these types of news articles you will likely be included in the same group of short-sighted and wrong-minded people who refuse to see the situation for what it is.
Fewer people are being influenced positively by these types of articles. They go by what they see happening in their home town and how their local economy is performing.
Currently, their is an overhang of supply and a potentially harmful and impending economic weakness about to take hold in the U.S.
Following the advice of the "expert" in this article could very easily leave a person holding a hand full of feathers rather than a parcel of valuable real estate.
I don't think he has his blinders on. I agree with him that we are going through a market correction where prices are dropping to more "normal" levels. Kohn's statement of "Not all home sellers have fully grasped the altered realities in their own local markets -- that they've got to reduce their asking prices if they truly want to sell -- so the process is still unfolding." is very accurate.
I see more buyers getting restless. A couple I am working with wrote an offer on a house yesterday and we are in negotiations. I have a buyer coming in town next week to sell her condo in Marco Island and buy a place here in Sarasota. I am also working another young couple that will probably make an offer as soon as their financing is arranged. I have others that want to buy but are a little apprehensive as they do not want to buy thinking that they can get a better price in 6 months. Once they fell that the bottom has set in they will purchase. Once the general public feels that the bottom has hit there will be a lot of buying. As more sellers drop their price to where the market is currently at I think more buyers will hop off the fence. Once they hop off the fence and buy they will be establishing the new market price or value. This will help Realtors and sellers establish a realistic asking price on existing and new listings.
We all know the negatives because that is all that is discussed these days in the newspapers, nightly news and forums.
How about the positives? Mortgage rates at a 6 month low, very strong job market (although it should weaken with the real estate slow down), few hurricanes, it is predicted that the winter up north will be long which does affect our market, and as prices have come down more and more can afford a home. I am not saying that we are at the bottom just that I see signs of life.
I welcome your comments as long as they remain constructive. If your comments get ugly and unprofessional I won't post them.
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