As the city of Fort Lauderdale, along with other hosing slump-hit cities in the US, slowly begins to rise up and repair the damage brought about by rising foreclosures and low-buyer interest, 2008 may, according to economists and housing industry analysts, be actually a year for buyers, as home prices are at their lowest, and inventory levels are high.
According to researchers at the National Association of Realtors (NAR), 2008 represents the best window that buyers will have to find excellent deals with excellent financing. If they opt to wait, prices and interest rates will be higher and reluctant buyers may be forced out of the market.
The Weak Dollar May Actually Be Good For The Housing Market
Although the drop in the value of the U.S. dollar may end up costing Americans more when they travel overseas or buy more imports, the drop in the greenback's value has resulted in more manufacturing jobs going back to the U.S. It also may mean added overseas investments in U.S. commercial or residential properties as well. In just a few years ago, the Canadian dollar was only worth 70 cents in U.S.
Currency, however today, the Canadian dollar has been pegged at around $1.05 to $1.10 U.S. This should mean that the US market can expect more Canadians and Europeans to be buying property here, since prices in the US are approximately 50 percent cheaper than they were just three years ago. In addition, corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting near-record profits, and the economy has generated 4 million net new jobs, with wages rising as well.
Recovery Has Started Despite The Foreclosures
According to NAR researcher, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate buys in states like Arizona, California, Florida and Nevada. The majority of these buyers are flippers whose investments did not payoff. In addition, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.
Other than the three states hit heavily by job losses in the automotive industry, which are Indiana, Michigan and Ohio, the states that first experienced a downturn in the Northeast, are now in recovery, an the states of Connecticut, Massachusetts, New York and Rhode Island were the first to feel the slump and are now well into a recovery. Furthermore, there appears to be a pent-up demand for first-time buyer properties due to a large number of Generation Ys, which refer to those born from 1977 to 1994, that are now buying their first homes. Furthermore, falling interest rates will again motivate many of these buyers to enter the markets now.
Reluctant home buyers these days need to realize that real estate still offers the best shelter, as some some interesting facts from the Federal Reserve shows that between 1995 and 2004, the average renter accumulated $4,000 in wealth, while the average homeowner accumulated $184,400. Furthermore, the usual homeowner holds their property for six years. Within this time frame, the NAR research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.
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