My original intention with this blog, was to include more tips on caring for your home & to tell you more about me. But it seems that the slant has been more towards market trends. To some this may be boring & I apologize for that. But it is very important to us. Real Estate has become a much published topic. We read about it in the newspapers & on the net. We hear about it on the evening news. We've seen it & it's effect in our daily lives.
Granted, a lot of what I've written is my educated opinion, obviously derived from my experience; sources that I've read; and, speaking with other real estate professionals. I've mentioned before that I really like numbers. They don't tell the whole picture, but do give us a great insight into what is happening. This is why I've tried to back up my opinions with facts & numbers, so it doesn't seem as if I'm just spouting off at the mouth. Goodness, knows I can do that also.
But the reason that I've written more about the market trends, is that this effects us all and is very important. With all that we've seen & heard in the real estate market, I think that it is something that needs to be addressed. We've all seen the doom & gloom articles & editorials and a lot of what I've read is pure bunk. My intentions are to try to give you a balanced account of the state of real estate. Yes, I do have my prejudices & biases, but I do try to keep those to a minimum when writing an opinion.
Sometimes, it is difficult for me to decide what to write about. There has been so much in the news that is of great concern. So, today, I am going to discuss the annual housing report released by the Harvard Joint Center for Housing Studies - "The State of the Nation's Housing 2006." http://www.jchs.harvard.edu/publications/markets/son2006/index.htm
The report overall is positive on the housing market - that "the housing sector continues to benefit from solid job & household growth, recovering rental markets, & strong home price appreciation," and as long as these remain in place, "the current slowdown should be moderate."
Households are expected to accelerate from about 12.6 million over the past years, to 14.6 million over the next ten which combined with projected income gains and a "rising tide of wealth" should "lift housing production and investment to new highs."
However, affordability will also intensify, as the economy is generating many low-wage jobs and land use restrictions are driving up housing costs. Incomes are rising much faster in the top ranges than in the bottom ranges for homebuyers. The number of households paying more than half of their income for housing has shot up & will continue to increase.
We've seen & heard about affordable rental housing disappearing. Just look at all of the condo conversions that we've seen around.
The report also goes into financing in that we've seen a shift from fixed-rate mortgages to adjustable-rate mortgages & other products. In just 2 years, the interest-only loan shot from relative obscurity to 20% of the dollar value of all loans & 37% of all adjustable rate loans in 2005. Payment option loans accounted for nearly 10% in 2005.
As bad as that sounds, the report says that only 3% of owners had equity less than 5% in their homes & 87% had a 20% or higher equity in 2004.
Housing gains are continuing even while home sales are softening. Driving housing will be the baby boomers who will boost markets for senior housing & second home.
Until next time when I plan to discuss the rising insurance rates & condo associations - Marc It Sold!