Today I heard Leslie Appleton-Young speak. She is the chief economist for the California Association of Realtors and I have always found her presentations highly intelligent and useful.
The number one question on all of our minds is, “Is 2012 going to be better?”. The answer is, “Yes, but…” (gotta love those qualifiers…)
Leslie’s overall message of the day: “We are definitely going in the right direction, but we still have a looooong way to go.”
Here are some of the better sound bites:
- The Scary
- 11%+ unemployment
- 29.7% of CA mortgages are underwater
- No government stimulus plans aimed at housing are anticipated
- The Good-
- Consumer confidence and most economic indicators are up,
- Interest rates are down,
- The combination of low interest rates and low prices make homes the most affordable they’ve been in decades
- Many all cash buyers- Eurozone (Germany) is starting to move money to the US
- The Issues –
- No houses to sell,
- Lots of short sales
- Transactions do not close on time
- Appraisals are still a large problem
- The Opportunities
- Perfect time for a move up buyer- Move up Homes have lost more of their value, relative to starter homes and interest rates are super low.
- Prices appear to be slightly rising on the low end, still softening on the higher end
- Rates should remain low through 2014. If rates DO rise, it is because our economy is doing well.
Overall Leslie thinks that 2012 will look a lot like 2011- slow, moderate growth. She states that the worst of the recession is over, but recovery will be slow and moderate.
Did you catch the Big Opportunity? Many of you bought your starter homes before the peak. You have the chance to sell that home (maybe with a bidding war!) and buy a larger home, now. Why would you do that? Because your current home will sell for a relatively higher value than the home you buy! Add today’s historic low interest rates and you are looking at a “no brainer” business proposal.