Looking forward to 2009

I have to say that I am happy that 2008 has come to a close. This has been a year of extreme market volatility with the country in a recession due to the Wall Street turmoil and the residential housing sector. Residential housing led us into this recession a few years ago and residential housing will lead us out. The reduction of interest rates is a first step in getting the housing ladder back on track. I am hopeful that lower interest rates and available credit will generate a recovery in the market. We still need financing from banks to be available and they must get back in the game and start lending to creditworthy borrowers instead of staying on the sidelines or punishing the good borrowers with dramatic increases in rates and terms.

So 2009 should start out a bit rocky but I believe we will see the resurgence of the first time buyer. Many are renting right now but with the lower rates they can do the math and lock in a low mortgage rate and a great sale price. A few of the bargain hunters have already started sifting through the inventory to see what they can buy. These are early signs of a market recovery. Current inventory at depressed levels is purchased and cleaned out and new inventory eventually becomes available.

Towards the second half of the year, barring any major financial or world events, we should start to see the $500,000 to $1 million market pick up. These buyers will be the sellers of the homes sold for $200,000 to $500,000.

The healthiest real estate recovery occurs with stimulating the first time home buyer market, which through lower interest rates, is happening today. So overall, I am optimistic for 2009.

Happy New Year to all!