Hi Desert Real Estate Forum

I recently read an article from the National Association of Realtors (NAR) discussing opportunities in the 2008 housing market. Although the forecast is not for a return to the boom years of 2004 and 2005, the article did paint a picture of a more stable housing market in 2008.

Housing forecasters predict that new and existing home sales will bottom out in either the second or third quarter of 2008. This is mainly due to the underlying strength of the U.S. economy. NAR is forecasting that existing home sales will bottom out in the second quarter of 2008 and then begin to rise over the remainder of the year. It is also expected that median home price will level off this year ending the decline of 2007.

Some of the reasons for this optimism is the fact that since the housing slowdown started in the second half of 2005 the economy has added 4 million new jobs, wages have increased 8% and household wealth has grown by 5 trillion dollars. According to NAR Chief Economist Lawrence Yun “the slowdown has never been about the underlying fundamentals of the economy. Consumers have the means to buy, but they’ve lacked the confidence. Once they see sales and prices stabilizing, they’ll be back in the market”

Of course, the availability and cost of credit has been a driving force in the housing decline. Creditors concerned about the subprime mortgage defaults and write offs associated with securities backed by such loans were hesitant to say the least to continue to pour money into this market. It is expected that there will be ample money available this year for most borrowers with sound credit.

So the bottom line may be that the next few months will provide an excellent opportunity for borrowers with good credit to get back into the market. Additionally, it appears as though sellers may only have to wait a little longer for prices to stabilize, and perhaps even see appreciation in the market again.