The Good, the Bad & the Ugly on the Nation’s Housing Market
Let’s start with the good about the national real estate market. According to an annual report on the state of the nation’s housing markets from the Joint Center for Housing Studies of Harvard University is optimistic about medium- to long-term prospects, estimating that unless there’s a serious, prolonged economic decline or a marked cutback in immigration, the nation will gain 14.4 million new households between 2010 and 2020, compared with 12.6 million between 1995 and 2005. That type of population growth translates to increased demand for housing and certain to swing the cycle back upwards in time. 
Now the Bad & the Ugly - the reality is in the short term the current housing slump is far from over and is shaping up to be the worst in decades.
How bad is the down cycle we are in? (The Ugly) The Harvard report noted that sales of existing homes fell 13 percent in 2007 to 4.9 million, and sales of new homes were down 26 percent to 776,000, the lowest level since 1996. The 500,000 unsold new single-family homes available in early 2008 was down from a mid-2006 peak of more than 570,000, but the slower rate of sales translates into an 11 month supply — an overhang not seen since the 1970s. A supply of more than six months is considered a buyer’s market.
Is the glass half full or half empty? Well that depends on which side of the fence you are on, If your a developer sitting with standing inventory in the wrong market you may feel your glass isn’t just half empty it’s bone dry. Even if you are a developer who followed leading indicators and cut production early or moved into stronger markets with better fundamentals you may feel that due to the current credit crisis your glass is at best half empty.
Same thing if you’re an investor who jumped late into a sellers market and threw fundamentals out the window and followed the incentives, media and hype in 2005 to option arm hell. If however you are investor who did not buy into the speculation understood fundamentals and leading indicators, you are now on the sidelines with opportunities abound and some low lying fruit ready for picking, just be sure to pick your markets and micro markets carefully and stick to the fundamentals.
Robert Stec
YAERD.org Advisory Board Member
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2 Responses to “The Good, the Bad & the Ugly on the Nation’s Housing Market”
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Some positive information in there. If we can hang on until it picks back up in 2010 we should be back in shape. Great post.
Jon Christopher of Short Sale Way
Great Blog! I have been selling real estate in Bend Oregon since 1981 and find it refreshing to find a helpful blog like yours! Keep up the good work!
http://www.bendoregonrealestateexpert.com/