It’s Still a Numbers Game
April 14th, 2008 categories: Real Estate News, Relocating
Now that the Masters golf tournament is over for another year, the Spring house hunting season has officially begun.
Each year, about mid-April, the Northern Virginia housing market begins to heat up. For those planning a reassignment or relocation to the area, late April to mid-June is when the buyers come to town in droves. These days, it appears to be the ideal time for that Spring house hunting trip. With temperatures in the 60s & 70s, blue skies & a comforting breeze, the conditions make it less of a chore and more an invition to enjoy the natural experience of the journey. And, today’s local paper, the Free Lance Star made the thought of buying more inticing for many. While the front page headline “HOUSING PRICES IN TWO-YEAR DIVE”, wasn’t telling us anything we didn’t already know, the account made a number of valid points.
John McClain, the deputy director of George Mason University’s Center for Regional Analysis, whose has closely studied housing trends in the Washinton Metro area since the mid 1970s, says the market’s advance until 2004 was a reaction to years of price stagnation and increases in job and wage growth. Additionally, McClain contends, as do many other market experts, that “irrational exuberance”, coupled with:
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Low interest rates
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Lax lending standards
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The expectation of many homebuyers for a substantial return on their investment
resulted in an economic or housing bubble, that was doomed to burst sooner or later.
According to GMU, 10-12 percent of the total listings in Stafford and Spotsylvania counties are short sales or foreclosures. The building boom, coupled with the high rate of foreclosures and short sales have resulted in a home inventory that is extremely high, the perfect storm for home buyers. Will these conditions last long? It may be difficult to predict the future of the home market, or the overall economy. But, one thing is certain, it took years of bad credit, bad loans, and bad decisions to get us into this mess. There’s no reason to think that the journey to clearer skies for the housing market won’t take just as long. For any home buyer, that’s a deal too good to be true!
I found your blog on MSN Search. Nice writing. I will check back to read more.
Eric Hundin