Dr. Lawrence Yun, Chief economist for the National Association of Realtor’s, recently addressed Realtors at large at the National Association of Realtors yearly convention. His prediction is that home values will remain flat for 2010-Q2 of 2012. His research shows that currently consumer confidence in the economy is relatively low, but did see a bit of an increase after the election, However, he shows that consumer confidence about the future is not great. Part of this is due to the unemployment rate.
Yun shared that business are holding on to cash and are focused on building up their reserves, and that they need to start using their cash to expand and create more jobs in-order for consumer confidence to increase and unemployment rate to decrease.
It is important to note that as long as the budget deficit continues to be out of control home values will be impacted by the government raising interest rates, which will make it more difficult for home owners to qualify to buy.
Currently, the total jobs in the market and home values are the same today as they were in the year 2000. Yun stressed that 100,000 jobs must be created every month to just keep up with the current unemployment rates of 9%. This is due to High School Students entering the job market.
Yun shared that home sales are under performing in relation to the population, but that the bubble has been busted and that values have stabilized in the past 18 months. He predicts that in 2011 that home values will increas 0.78% nationally and 2.48% in 2012, but unemployment is not predicted to recover till 2013.
Therefore, people buying today and locking in to current rates of 4.2% are in the best position to take advantage of the market recovery in the years to come.
For more details on Dr Yun’s presentation please view the slide show below, or view his entire presentation in the video below.
Northern Colorado Real Esate Specialist