Real Estate Outlook: Strong Sales Predicted

Will housing outperform the overall economy in 2010 as we pull out of the Great Recession?

Nothing is absolute in the predictions business, but there are solid indications that, yes, housing is likely to rebound more energetically than the overall economy.

Here's why: Even the most bearish Wall Street analysts now concede that home sales are up in many areas from year-earlier levels -- sometimes by extraordinary percentages.

For example, MDA DataQuick reports that sales in the greater Phoenix market in November were 62 percent higher than the year before.

Prices either have bottomed out in dozens of these markets or are close to it. That's because the distressed sales component of local volume - short sales, REOs and foreclosures - has been declining slowly but steadily.

In his latest forecast, Jay Brinkmann, chief economist for the Mortgage Bankers Association, says both existing and new home sales will be higher in 2010 than in 2009 - and 2009 was better than 2008.

No question that a key part of the energy in housing will be the direct result of stimulus efforts by the federal government - especially the two tax credit programs -- that will push sales and even pricing through mid year.

The overall economy, on the other hand, according to Brinkmann, is likely only to grow slowly in the first half of 2010, and not really warm up until the second half.

The heavy anchor dragging on national economic growth -- and on housing demand -- will continue to be unemployment. Brinkmann says that "the time of job destruction is over" in this cycle - that is, the number of new layoffs and new unemployment insurance claims filings are trending down.

But we haven't yet moved into the next phase nationwide - that of "job creation," which may not begin until later in the year, he says, and may be a long, slow process.

The National Association of Realtors' chief economist, Lawrence Yun, sees a strong sales year ahead - up 20 percent over 2009. In some markets, he also expects to see a return to modest and sustained price increases - anywhere from two to five percent on average.

Will higher interest rates put a big dent in these projections? Many economists are forecasting 30 year rates in the upper 5 percent range later in the year.

Is the Hoboken Real Estate Market Just Right?

You probably remember the line about porridge from Goldilocks: It wasn't too hot, it wasn't too cold, it was ... just right. Last week's new housing starts in Hoboken were reported by the media as further evidence of the deep hole the home building industry is in: Starts were up by barely half a percent nationwide, and permits for future construction were down.

But is that "cold," or maybe something else? If you dig below the anemic sounding half a percent gain, you discover something very different: New starts by builders on single family homes were actually up by nearly four percent for the month nationwide.

Now a 4 percent gain, combined with lower permits, are hardly dramatic enough to say new home building is heating up. Then again, they're definitely not stone cold.

Market Analysis for First 6 Months of this year

Buyers are still cautious with the current economic enviroment. The problem is 6 months from now can be a completely different market. Its quite amazing, no matter how many times you tell people to buy low, sell high, buy when people are fearful and sell when people are greedy, no one seems to care, I think a large part due to laziness.

Opportunity is here, if you have been dreaming of owning property, if you can afford and are in the market to buy, BUY! The median sales price dropped 10% from the beginning of the year to $535K in Hoboken. Jersey City new median price for May is $257K. What this is suggesting is that a "depression" is virtually not going to happen, it stills makes me wonder why people are still getting cold feet and/or not pulling the trigger when they have all the financials.

I came up with a few reasons why maybe buyers are not pulling the trigger:

1) Laziness, plain and simple, look if you do not want to the research on the financials to make yourself feel secure then its your fault why your not pulling the trigger

2) If you are working with a good realtor, then TRUST them! If a realtor is bending over backwards for you and hes smart about the market knows what hes doing then ask him questions until you feel comfortable.

3) They talk to there friends or people at work! this is the WORST! plain and simple.

Overall reasons for this happening can span on or for a number of different issues. But the reasons stated above seem to be the most apparent.