A National Housing Market to Embrace

March 25th, 2008 admin Posted in Uncategorized |

There is an
old saying – “Opportunities are never missed. Someone will take the one you
miss.” Today’s housing market might just be an opportunity you should
examine before you believe the national media headlines.

While sales
of existing homes are off from their high, last year was still the fifth best
year on record for national existing-home sales. As for prices, the national
median existing-home price remains within 2 percent of the all-time high set in
2006.

The biggest
enemies of today’s housing market and the economy in general are pessimism and
uncertainty. Statistics clearly suggest a sizable pent-up demand in the
marketplace. Yet home sales have remained soft. Why? Lack of buyer confidence
may be one contributor.

The lack of
buyer confidence not only impacts homeowners and the housing industry, but could
easily spread to the economy. Any further weakening in the housing market and
its related housing wealth impact could slow the economy into a no growth zone,

So what can
we do to bolster confidence?

Let’s look at
the facts. Over the past two years:

· Average wages have risen by 8
percent

· 4.3 million jobs have been
added

· Total household net worth (assets
minus liability) was more than $6 trillion higher in 2007 than 2005 (despite
some losses in housing equity)

· Nearly 2 million new households were
formed

This all
suggests that there are many more people with jobs at higher wages and with
higher wealth accumulation. However, the rising inventory of homes on the market
and slower sales indicate that these potential buyers are uncertain and may be
sitting on the fence.

Over time,
homeownership has proven to be a good long-term investment. A look at today’s
market fundamentals makes a very good case for buying a home if your life and
family conditions warrant it.

We encourage
fence-sitters to get into the market and look around, and we think you’ll be
pleasantly surprised at what you find.

There are
many low-cost, sound mortgage products today – from prime conforming loans to
those insured by the Federal Housing Administration. The economic stimulus
package recently signed into law by the president will also help expand the
availability of affordable and safer home financing
options.

The package
increases the loan limits on FHA-insured loans, as well as those purchased by
Fannie Mae and Freddie Mac. Higher FHA loan limits will help an additional
138,000 Americans purchase homes and allow nearly 200,000 owners to refinance
and potentially keep their home, according to research from the National
Association of Realtors^®.

In addition,
NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will
help as many as 500,000 people refinance their loans and could help reduce
foreclosures by as much as 210,000. On top of that, more than 300,000 additional
home sales could be generated.

In the end,
these higher loan limits alone can be expected to reduce housing inventories and
strengthen home prices by two to three percentage points, according to
NAR.

Consult the
Government Affairs section of Realtor.org for an article entitled: What Economic Stimulus Means for
REALTORS® which outlines the specifics on the economic stimulus package, including a chart of the new
loan limits by metro area.

So join the
fight against irrational pessimism. Let’s see if we can help take advantage of
the buffet of buying opportunities in the Ann Arbor Real Estate
Market.

Click here to search all listings in Michigan with pictures and tours - FREE!

Kathy Toth and Team

www.KathyToth.com

Keller Williams Realty