Last week I had the pleasure of attending the National Association of Realtor’s Convention in San Diego – One of the sessions was led by Dr. Lawrence Yun, Chief Economist for the Association. During the presentation Dr. Yun shared his forecast for the 2010 National Real Estate Market – here are few highlights.
I hesitated to write this post, as I’ve often been quoted as saying that looking at the national real estate news is like listening to a national weather forecast – the national numbers represent averages – what’s truly important to you is understanding your local market. I decided to write the post, mainly to share my takeaway – on a national level the real estate forecast for 2010 is positive news. I concur, on a local level we are seeing an increased number of properties going under contract and closing.
The Tax Credit Stimulus for 1st Time Buyers generated an additional 300,000 – 400,000 buyers – total of 1.5 million frst time home buyers for 2009.
47% of ALL Home Buyers were First Time Home Buyers – This is the Highest percentage in years, usually hovers around 40%
15% Increase in the number of sales transactions – which represents an additional 800,000 sales!
We’ve seen 8 Straight Months of Increase in Number of Pendings (numbers adjusted for seasonal averages)
3-5% Average Appreciation will return
9 Month Current Supply of Homes Priced under $250,000
10 Month Current Supply of Homes Priced $250,000 – $500,000
15 Month Current Supply of Homes Priced Over $500,000
Current National Average Supply of Homes: 8 Months – We hit a low of 4 months supply in January 2005 and hit a high of 12 months average supply – so the numbers are improving.
Helpful Point – a ‘balanced’ market has a 6 month supply of homes – when you have more than 6 months supply it represents a buyers market.
Dr Yun also noted that new home construction starts are now well below average – which could lead to a lack of supply of new homes as the market strengthens.
The continued recovery of the real estate market hinges significantly on home prices stabilizing – should the market see another decline in home values, that would create a ripple effect of ‘strategic defaults’ – that is home sellers choosing foreclosure as their home would be valued less than what they owe. We are fortunate in the Cary market area, our foreclosure rates are well below the national average.