Real Estate Articles
Brought to you by the members of our Prescott, Arizona Real Estate Team
Real Estate Market in 2007
- March 20, 2007 in The Market
- Excerpted from Today's Buyer's Rep Publication, December 2006, article written by Allen Alexander, Sales and Marketing Mgr, Calculated Industries, Carson City, NV
During the 4th General Session on Economic and Housing Outlook, the following forecasts for 2007 were noted:
- Homes are on the real estate market for an average of 7 months
- Condos are taking even longer
- New-home sales are down 8 percent, expected to dip under 1 million units
- Existing-home sales are projected to decline 8 percent to 5.94 million
- Real estate purchases are down 5 percent
- Refinances are down 25 percent
However, short and long-term trends need to be considered. The figures noted above closely mimic home sales in 2003, which marked the third consecutive year of record home sales.
The term "normalizing," in this sense, means that the housing market is returning to its long-term trend. What has been happening the last several years has been very desirable in terms of record low rates, record high appreciation, (especially in certain areas/markets), and looser underwriting guidelines. The National Association of REALTORS®, and other seasoned real estate-involved entities said that it wouldn't last. Now, the tide has turned and the market has slowed. Surprise?
This normalizing process could take over two years to fully work itself out. Many have predicted that this has been ongoing since the summer of 2005 and could continue through 2007, creating a buyer's market if the inventory remains solid. The biggest challenge is helping sellers understand that buyers are interested and sincere. When looking at closed escrows and the ratio of asking price to closed price, the difference is surprisingly small, demonstrating that the buyers are willing to pay fair market price for a home. On the other hand though, buyers will shun a home that they perceive as overpriced.
Today's buyers are educating themselves regarding smart real estate purchases by using the many websites with information important to know. They are looking for a competent and knowledgeable REALTORŽ with a good web presence and lots of quality information on their site.
It might be a tougher market for a while, but one way to improve the forecast is to make sure that you keep abreast of the trends and use these slower times to enhance your knowledge which will benefit all the people that you are working with as a REALTORŽ.
