Wednesday, August 09, 2006

Todays Real Estate Projections

David Berson, chief economist for mortgage giant Fannie Mae gave some projections about the real estate market.
  • Average home price apprecition which had been in double digit are expected to decline to 3 percent or below by the end of the year (other colleagues predict 4 to 6 pecent).
  • If speculators continue to dump rentals or second homes pushing inventories and appreciation to drop to 1-1.5 percent not seen since recession in early 1990's.
  • The condo market will be vulnerable to price declines and investor dumping.
  • There will not be widespread decline of property values part of current down cycle. Only in markets where speculation was rampant in 2003-2005 and where job and population growth are low.
  • Mortgage rates will not rise significantly higher than today's rates which are still historically low.
  • In flatten markets sellers need to become more creative by offering holding second notes or concessions to push the sale, or buy down the purchasers interest rate to lower monthly payments
  • Buyers should acquire real estate at prices and terms that were unthinkable a few years ago and do go out to do that.

Courtesy Planet Realtor.