Real Estate Outlook positive for 2009

Richard Bove, a financial analyst for Ladenburg Thalmann, provides some positive signs that the real estate market is improving in 2009. With strong intervention by the government regarding interest rates, especially in the home mortgage sector, so far, and the pending stimulus package the new administration is putting together, he expects housing prices to stabilize within the year. Already there are signs that gradual, positive trends are starting:

• housing prices are up 2/10% in New England
• mortgage applications are increasing, not only due to refinancing, but also from buyers purchasing at very low prices
• mortgage rates are at 50 year lows still for 30-year mortgages, with the percentages dropping for shorter term mortgages
• consumers are still paying lower prices for gas and at retail stores
• Americans are saving more – the national savings rate rose almost 3% recently

While none of these changes seem to be singularly significant, they are collectively signs of a stabilizing market. Ultimately, Bove says, savy market participants will take advantage of the low-cost money, low prices and stablilzing local markets for 2009.

Source: Real Estate Outlook: What’s in Store for 2009 by Kenneth R. Harney, published in February 2009 edition of Real Estate Update, distributed by the Law Offices of Fred Peet