Real Estate Market Update For Fall 2007 And Forecast 2008
Cyclical Real Estate Market
Anyone experienced in real estate investing knows that the market goes up and down, but the trend is always upward if you hold on long enough. Only a first-degree optimist could have believed that the frenzied pace of the past few years could continue. It was unsustainable, and everyone connected with the business knew that in their heart-of-hearts.
Real Estate Speculators That means the market trend will still be upward beyond the downturn of 2007, but it also means that many of the speculators who made fairly easy money during the boom times of the last several years will be shaken out. It’s also proof that America’s supply-and-demand system works.
The rest of 2007 will continue to be slower than most investors would like, and there are forecasters who predict a similar situation throughout 2008. However, the overall market is expected to rebound in 2009, although no one is predicting a return to the dizzying pace of the recent past.
Areas with Market Declines
The places hardest hit by the return to a more normal market situation were also the hottest markets during the run-up: Southern California, Las Vegas, and Florida, which have experienced the largest declines in home prices in 2007. Texas, which was also a hotbed of growth, has also shown some significant price declines during that period.
With the nation’s home sales down overall, sales of new homes have also begun to slow. In fact, the National Association of Home Builders (NAHB) predicts a drop of slightly more than 13%, which would be the biggest drop since 1991 (15%).
There is good news buried among those figures, however. With the decrease in new home construction, the market will finally have a chance to absorb many empty houses left over from the boom times. After those homes have been sold, the supply-and-demand cycle will again kick in, shifting the emphasis back toward building new homes to fill a growing demand from buyers.
Investors Look for Stable Economies
Although the market won’t regain its white-hot status in the near future, there are some areas of the country where real estate investors might be able to profit relatively quickly when the market begins to rebound. The strategy is to look for areas that have seen home prices plummet, even though then local economies are still stable, vacancy rates are low, and price-to-income ratios are reasonable. Such areas would include hard-hit areas like Orlando, Las Vegas, and Phoenix.
Which areas are investors working in and what are the new strategies? Find answers at The Flipping Houses Blog. Learn how to fix up a house with interior design secrets for more money at http://www.doghousetodollhousefordollars.com
Copyright © 2007 Jeanette Fisher
Tags: Jeanette Fisher, real estate investing, real estate market
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