Learning to “read” the economic factors in your area is critical to future planning. This factor has to be included in every marketing and business plan that is put together. It should be reviewed at least every six months and changes made accordingly. This blog will focus on the Real Estate aspects of our economy and in what direction they may be headed.
“Continuing foreclosures and an “overhang” in housing inventory will likely prolong the housing slump for several more years, said economists who spoke Friday during the annual meeting of the National association of Reals Estate Editors.”
The following are some observations made by a variety of economists. I caution you to examine your own area as it may be different that the forecast that are made on a nationwide basis.
- housing demand may not see a normal balance with new household formation and housing starts until 2013.
- home and rental unit vacancy rates are running about 2 million units above normal levels.
- some economists forecast home prices to drop another 1 to 3% before we hit bottom.
In my area, the metro-Phoenix area, I still get calls every week from homeowners that want to sell their home (or give it away) because the loan amount is considerably more than the current home value. In helping then make an educated decision we have to consider their “real current value”, the future of their neighborhood and their own financial situation.
Many homeowners are afraid and even though they might not be upside down in their home, they fear another price drop and losing more of their equity. With the baby boomers now reaching retirement age and the uncertainty of the market (retirement accounts) selling and safeguarding their equity is a real consideration.
Be on the lookout for economic factors that can influence you business. Often, they represent opportunities.
As my good friend often tells me: ” these are our golden years, make them work for you”
Have a great day!