Mark Zandi: Recession to end September 2009
In a speech to Utah business leaders, Mark Zandi, chief economist and co-founder of Moody’s Economy.com, said he expects the U.S. recession to end Sept. 15, 2009. Although he said 2009 would be “painful” and 2010 would be “uncomfortable,” he ended his speech with some reasons for optimism. First, the U.S. is paying a lot less for energy, and even though we have probably seen the low in regard to energy prices, he said he doesn’t expect prices to rise significantly in the near term.
Zandi's second reason for optimism is the fact that housing is becoming much more affordable. Nationally, he expects home prices to bottom in the third quarter; however, in the Salt Lake area, he expects prices to continue to fall. The problem in Salt Lake is that both the house price-to-income and house price-to-rent ratios are still above their historical norms. In other areas around the state, however, Zandi’s analysis pointed to more correctly valued prices. “In fact, in markets where you do see affordability, prices are stabilizing,” Zandi said.
Finally, Zandi is optimistic because he expects help from the federal government. The proposed fiscal stimulus and foreclosure mitigation programs along with aggressive efforts from the Federal Reserve should bring the U.S. out of recession. “We’re going to get out of this mess, and we’re going to get out of it by next year,” he said.
Friday, January 23, 2009
Monday, January 12, 2009
Four Steps to Recovery
The Four Step Prescription for Recovery
Possibly the most important ingredient in the 2009 real estate correction is the fact that real estate makes up 20% of the Gross Domestic Product in this country and regardless of which side of the political fence you fall on, our country cannot be fixed without first fixing the housing sector.
Real estate should be gaining a great deal of attention over the next several months, particularly by our new administration.
With this important information in tow, it is important to point out that we currently have several key indicators that may position our country for a real estate recovery in 2009:
1. Dropping Interest Rates—According to NAR’s December 17, 2008 article entitled Fed Action Creates Best Interest Rates in 50 Years, Realtors® Report, “Mortgage rates which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country.” The article went on to report, “NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes.”
2. Improving Affordability—According to statistics released by the National Association of Home Builders, housing is becoming increasingly affordable for Utah residents. Statistics released by the organization, following the third quarter of 2008 found that Ogden-Clearfield ranked 80 out of 223 metropolitan statistical areas for housing affordability, followed by Salt Lake at 136, Provo-Orem at 160 and the St. George area at 204. According to the index, 67 percent of homes sold in the Ogden-Clearifled area during the third quarter of 2008, were affordable to families earning the area’s median household income of $65,000. In Salt Lake City, 55.3 of homes were affordable to families making the median household income of $65,300. In Provo-Orem, 48.2 percent of homes were affordable to families making the median household income of $60,000. In the St. George area, the least affordable market in the metro, 33.8% of homes were affordable to families earning the median household income of $55,100.
3. Government Intervention—As we noted before, with real estate making up 20% of the Gross Domestic Production in this country, it is imperative that the government take action to correct the housing sector. We need to move through the current financial crisis and restore the flow of credit so that qualified buyers are able to take advantage of improved affordability and successfully purchase homes. To respond to this, the government is currently looking at a number of corrector options including tax benefits, home ownership credits, subsidies or interest rate stabilization, to name a few. President-elect Obama and his economic team are in the process of developing an economic recovery plan designed to help Main Street and Wall Street with an ultimate goal of creating at least 2.5 million jobs while rebuilding our infrastructure, improving our schools, reducing our dependence on oil and saving billions of dollars. According to CNNMoney.com’s December 23, 2008 article Obama Closing in on Stimulus Plan, Vice-President-elect Joe Biden was quoted saying, “While our short-term goal is to start creating jobs as quickly as possible, we plan to invest in areas that will produce long-term benefits for the long-term health of our economy.”
4. Slowing of Distressed Properties—The timing of our price recovery may depend on how quickly the government takes steps to mitigate foreclosures. We expect sales of distressed properties to peak in early 2009—a critical factor in the housing market that directly impacts the timeframe for stabilization in the median price. NAR reported in its December 17, 2008 article entitled Fed Action Creates Best Interest Rates in 50 Years, Realtors® Report, “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market,” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
Looking forward to 2009, many experts agree that the financial system will begin to show signs of stabilization in early 2009 and we may begin to see a real estate turnaround by the summer. If you are considering buying, this should serve as a good indicator that now may very well be the time to purchase real estate.
If you are considering selling, possibly more so than ever, you need a qualified Realtor® who can assist you in selling your home. It is usually not enough to simply post your home on the MLS and post a For Sale sign in the yard. You need someone like myself who understands the intricacies, inventory and challenges of your local market and someone who knows how to properly position your home so it stands out among the sea of listings currently available.
If you are considering buying or selling your home in 2009, I have the resources, knowledge and experience to properly represent you in today’s market. Contact me today for the representation you deserve.
Possibly the most important ingredient in the 2009 real estate correction is the fact that real estate makes up 20% of the Gross Domestic Product in this country and regardless of which side of the political fence you fall on, our country cannot be fixed without first fixing the housing sector.
Real estate should be gaining a great deal of attention over the next several months, particularly by our new administration.
With this important information in tow, it is important to point out that we currently have several key indicators that may position our country for a real estate recovery in 2009:
1. Dropping Interest Rates—According to NAR’s December 17, 2008 article entitled Fed Action Creates Best Interest Rates in 50 Years, Realtors® Report, “Mortgage rates which had averaged 6.3 percent in the third quarter, have recently fallen into the 4 percent range in some parts of the country.” The article went on to report, “NAR has estimated that a one percentage point decrease in mortgage rates will increase home sales by more than 500,000 homes.”
2. Improving Affordability—According to statistics released by the National Association of Home Builders, housing is becoming increasingly affordable for Utah residents. Statistics released by the organization, following the third quarter of 2008 found that Ogden-Clearfield ranked 80 out of 223 metropolitan statistical areas for housing affordability, followed by Salt Lake at 136, Provo-Orem at 160 and the St. George area at 204. According to the index, 67 percent of homes sold in the Ogden-Clearifled area during the third quarter of 2008, were affordable to families earning the area’s median household income of $65,000. In Salt Lake City, 55.3 of homes were affordable to families making the median household income of $65,300. In Provo-Orem, 48.2 percent of homes were affordable to families making the median household income of $60,000. In the St. George area, the least affordable market in the metro, 33.8% of homes were affordable to families earning the median household income of $55,100.
3. Government Intervention—As we noted before, with real estate making up 20% of the Gross Domestic Production in this country, it is imperative that the government take action to correct the housing sector. We need to move through the current financial crisis and restore the flow of credit so that qualified buyers are able to take advantage of improved affordability and successfully purchase homes. To respond to this, the government is currently looking at a number of corrector options including tax benefits, home ownership credits, subsidies or interest rate stabilization, to name a few. President-elect Obama and his economic team are in the process of developing an economic recovery plan designed to help Main Street and Wall Street with an ultimate goal of creating at least 2.5 million jobs while rebuilding our infrastructure, improving our schools, reducing our dependence on oil and saving billions of dollars. According to CNNMoney.com’s December 23, 2008 article Obama Closing in on Stimulus Plan, Vice-President-elect Joe Biden was quoted saying, “While our short-term goal is to start creating jobs as quickly as possible, we plan to invest in areas that will produce long-term benefits for the long-term health of our economy.”
4. Slowing of Distressed Properties—The timing of our price recovery may depend on how quickly the government takes steps to mitigate foreclosures. We expect sales of distressed properties to peak in early 2009—a critical factor in the housing market that directly impacts the timeframe for stabilization in the median price. NAR reported in its December 17, 2008 article entitled Fed Action Creates Best Interest Rates in 50 Years, Realtors® Report, “To boost the economy, it is critical to stem the rising tide of foreclosures and boost home buyer confidence in the housing market,” McMillan said. “Lower interest rates coupled with increased foreclosure mitigation are the key ingredients to stabilizing the housing market and preserving communities and homeownership.”
Looking forward to 2009, many experts agree that the financial system will begin to show signs of stabilization in early 2009 and we may begin to see a real estate turnaround by the summer. If you are considering buying, this should serve as a good indicator that now may very well be the time to purchase real estate.
If you are considering selling, possibly more so than ever, you need a qualified Realtor® who can assist you in selling your home. It is usually not enough to simply post your home on the MLS and post a For Sale sign in the yard. You need someone like myself who understands the intricacies, inventory and challenges of your local market and someone who knows how to properly position your home so it stands out among the sea of listings currently available.
If you are considering buying or selling your home in 2009, I have the resources, knowledge and experience to properly represent you in today’s market. Contact me today for the representation you deserve.
10 Ways to Get Your Home Ready to Sell
Here are some ideas to get your home ready to sell. These are all things you do not want to overlook when buyers are coming through!
1. The lawn
See your yard as an extension of the house and give it a thorough once-over. Trim unruly bushes, pull weeds, spread fresh mulch and keep it mowed. Your yard sets the expectations of the buyers before they’ve even stepped in your house. Also, consider installing attractive outdoor lighting. It goes a long way (for a little investment) toward creating a dramatic mood. And if you have a dog, clean up the messes.
2. Smells
Give your house the "sniff test." Nothing is more distracting to a prospective buyer than a house that smells stale ... or worse. Often, you become so use to the smell of your own home that you don’t notice scents that might offend visitors. Empty the garbage, load dirty clothes into the washing machine, run a lemon rind through the disposal, give wood furniture a quick polish, and for goodness sake, clean the litter box.
3. Keep in neutral
Tone it down. Make your house a place that anyone could imagine living in. This means removing most evidence of your personal taste. Accent walls of vivid hues are all the rage now, except in the real-estate marketplace. Decorate with a rigorous devotion to beige. Neutral walls, pale furniture, soft lighting and inoffensive art all go a long way toward creating a crowd-pleasing interior. Store your collections in a safe place for the duration of the selling process. Remember, you want prospective buyers to look at the space, not get distracted by your stuffed animal collection.
4. Don’t stash it
Get rid of everything you wouldn’t want your mother to see. Prospective buyers will open the oven, investigate drawers for function and capacity, and study your closets and medicine cabinet. Part of preparing your house to sell is a ruthless purging of all these places and a thoughtful review of potentially embarrassing items.
5. Distracting doggie
The dog may not be so well-behaved when you’re not there. A barking dog is extremely distracting when prospects are trying to get a detailed look at your house. Even though he might be contained, his voice will carry. Take him with you if you can, or drop him off at a pet-friendly neighbor’s house and repay her with house-sitting or a similar favor.
6. Team loyalties
Put your fan-of-the-year behavior on hold for a while, and stash your team merchandise in the attic. You don’t want to lose a buyer over a foam finger.
The same goes for religious paraphernalia, although that may actually be less of a deal breaker.
7. Dirty dishes
Clean the dishes in the sink. People will not understand you were in a rush to get out the door that morning, they’ll think you’re a slob who couldn’t be bothered to put the dishes in the dishwasher -- and probably hasn’t taken very good care of the house. If it means you have to take your family out to breakfast, make sure to leave your kitchen pristine. The same goes for the bathroom. Dry the inside of the sink and the surrounding counter completely before you leave the house.
8. Fix Up
Everything in your home must be in good working order before you put it on the market. This process can take a couple of months, but you need to fix all broken fixtures, change all burned-out light bulbs, repair any flaws in the walls and refresh any paint that needs it. The same goes for outdated or worn wallpaper. Some things do not get better with age, and nothing dates a room more than '80s wallpaper.
9. Clear the space
You want buyers to immediately begin imagining themselves living in your house, and they’ll have a hard time seeing beyond the pictures of your family at Beaver Creek and the old issues of Garden & Gun. Even worse, they might find your taste in books laughable or your choice of evening wear tacky and decide they couldn’t possibly live in your house. So clear every surface, every side table, every coffee table, the sideboard, the desk, and the dining room table. You can put one item in each room, and it should be a plant or a flower arrangement.
10. Pack it in
Remove extra furniture that clutters the space -- side tables, footstools and magazine racks -- and takes up more space than a fixed chair. Create simple arrangements with maximum impact. Often people arrange their living room as if they’re hosting the neighborhood meeting, with all the furniture lined up along the walls. Instead, place a sofa facing the fireplace, and flank it with two chairs and coffee table in between. This will create visual depth and an inviting vignette.
1. The lawn
See your yard as an extension of the house and give it a thorough once-over. Trim unruly bushes, pull weeds, spread fresh mulch and keep it mowed. Your yard sets the expectations of the buyers before they’ve even stepped in your house. Also, consider installing attractive outdoor lighting. It goes a long way (for a little investment) toward creating a dramatic mood. And if you have a dog, clean up the messes.
2. Smells
Give your house the "sniff test." Nothing is more distracting to a prospective buyer than a house that smells stale ... or worse. Often, you become so use to the smell of your own home that you don’t notice scents that might offend visitors. Empty the garbage, load dirty clothes into the washing machine, run a lemon rind through the disposal, give wood furniture a quick polish, and for goodness sake, clean the litter box.
3. Keep in neutral
Tone it down. Make your house a place that anyone could imagine living in. This means removing most evidence of your personal taste. Accent walls of vivid hues are all the rage now, except in the real-estate marketplace. Decorate with a rigorous devotion to beige. Neutral walls, pale furniture, soft lighting and inoffensive art all go a long way toward creating a crowd-pleasing interior. Store your collections in a safe place for the duration of the selling process. Remember, you want prospective buyers to look at the space, not get distracted by your stuffed animal collection.
4. Don’t stash it
Get rid of everything you wouldn’t want your mother to see. Prospective buyers will open the oven, investigate drawers for function and capacity, and study your closets and medicine cabinet. Part of preparing your house to sell is a ruthless purging of all these places and a thoughtful review of potentially embarrassing items.
5. Distracting doggie
The dog may not be so well-behaved when you’re not there. A barking dog is extremely distracting when prospects are trying to get a detailed look at your house. Even though he might be contained, his voice will carry. Take him with you if you can, or drop him off at a pet-friendly neighbor’s house and repay her with house-sitting or a similar favor.
6. Team loyalties
Put your fan-of-the-year behavior on hold for a while, and stash your team merchandise in the attic. You don’t want to lose a buyer over a foam finger.
The same goes for religious paraphernalia, although that may actually be less of a deal breaker.
7. Dirty dishes
Clean the dishes in the sink. People will not understand you were in a rush to get out the door that morning, they’ll think you’re a slob who couldn’t be bothered to put the dishes in the dishwasher -- and probably hasn’t taken very good care of the house. If it means you have to take your family out to breakfast, make sure to leave your kitchen pristine. The same goes for the bathroom. Dry the inside of the sink and the surrounding counter completely before you leave the house.
8. Fix Up
Everything in your home must be in good working order before you put it on the market. This process can take a couple of months, but you need to fix all broken fixtures, change all burned-out light bulbs, repair any flaws in the walls and refresh any paint that needs it. The same goes for outdated or worn wallpaper. Some things do not get better with age, and nothing dates a room more than '80s wallpaper.
9. Clear the space
You want buyers to immediately begin imagining themselves living in your house, and they’ll have a hard time seeing beyond the pictures of your family at Beaver Creek and the old issues of Garden & Gun. Even worse, they might find your taste in books laughable or your choice of evening wear tacky and decide they couldn’t possibly live in your house. So clear every surface, every side table, every coffee table, the sideboard, the desk, and the dining room table. You can put one item in each room, and it should be a plant or a flower arrangement.
10. Pack it in
Remove extra furniture that clutters the space -- side tables, footstools and magazine racks -- and takes up more space than a fixed chair. Create simple arrangements with maximum impact. Often people arrange their living room as if they’re hosting the neighborhood meeting, with all the furniture lined up along the walls. Instead, place a sofa facing the fireplace, and flank it with two chairs and coffee table in between. This will create visual depth and an inviting vignette.
Friday, January 2, 2009
A New Year
HAPPY NEW YEAR 2009!!!
I am excited about 2009. My last month of 2008 was really busy with several buyers finding homes and new buyers beginning their search! I also have sellers who are being successful with consistent house showings and very interested buyers discussing purchasing terms!
There are a few factors that I think are creating this surge of activity. First, historic interest rates are moving buyers to lock in at great rate. Second, there are about 1,400 active Realtors in Utah County who have paid their Board dues. (Just six months ago we had 2,200) Third, 697 active buyers in the market as of today, that is a great number of buyers for this time of year! Fourth, listings (homes for sale) are down from 5,306 during the start of the summer to 4,321 as of today, almost 1000 homes less.
Some good things....
1. The interest rate….it is hovering about 5 % and even dropped during one morning right before Christmas, to 4.5%.
Also if you are thinking of refinancing now is a great time. The rule of thumb with a refinance is that you are going to be in the home longer than the 3 years, and to refinance when you can get the rate to drop more that 1 % below your current rate.
2. Ask me for a market update on your specific market, city, or Utah County in general. Right now the number of Active buyers (under contract and sold for the last 45 days), is revealing in light of the number of listings.
3. HAPPY NEW YEAR!!! 2009 is going to be fine! The housing market is improving! I would love to talk to you about your New Year Resolutions and how those apply to your current housing situation!
I am excited about 2009. My last month of 2008 was really busy with several buyers finding homes and new buyers beginning their search! I also have sellers who are being successful with consistent house showings and very interested buyers discussing purchasing terms!
There are a few factors that I think are creating this surge of activity. First, historic interest rates are moving buyers to lock in at great rate. Second, there are about 1,400 active Realtors in Utah County who have paid their Board dues. (Just six months ago we had 2,200) Third, 697 active buyers in the market as of today, that is a great number of buyers for this time of year! Fourth, listings (homes for sale) are down from 5,306 during the start of the summer to 4,321 as of today, almost 1000 homes less.
Some good things....
1. The interest rate….it is hovering about 5 % and even dropped during one morning right before Christmas, to 4.5%.
Also if you are thinking of refinancing now is a great time. The rule of thumb with a refinance is that you are going to be in the home longer than the 3 years, and to refinance when you can get the rate to drop more that 1 % below your current rate.
2. Ask me for a market update on your specific market, city, or Utah County in general. Right now the number of Active buyers (under contract and sold for the last 45 days), is revealing in light of the number of listings.
3. HAPPY NEW YEAR!!! 2009 is going to be fine! The housing market is improving! I would love to talk to you about your New Year Resolutions and how those apply to your current housing situation!
Subscribe to:
Posts (Atom)
