Real Estate Market Conditions

Topic #2 from the Real Trends Gathering of Eagles: Market Conditions

First of all, it is important to note that there is no such thing as a "national real estate market." All markets are much more local. Most experts agree, though, that the real estate markets throughout the US (with some exceptions) bottomed out in the 4th Quarter of 2006. However, there has not been much of a recovery yet; inventories are still high and prices are still soft.

The NAR reported that transactions were down only 9% in the 3 Quarter of 2006. This number is suspect because most other sources, including Realogy and Real Trends reported a 16 to 18% drop. The average should be somewhere in the 16.5% range.

Also, for the 1st time in 16 years, the median commission rate INCREASED. I believe this is because the consumer really doesn't want to "do it themselves" and are willing to pay for professional marketing and representation in their real estate transactions. This becomes even more important to them during slower markets.

Also, a representative from Countrywide Mortgage reported that he believes the current market doldrums will continue through the middle or to the end of 2008. Inventories will continue to increase and prices will continue to soften. However, this is great news for buyers, even though some lending criteria will get tougher, especially for 1st time buyers. The popularity of private mortgage insurance is rising and will allow those buyers more ways to qualify.