According to a recent report by Managing REO Online Magazine dated July 9, 2008 Volume 3 Issue 8
Link: (http://www.managingreo.com)
“Housing starts in 2008 are expected to be 36% lower than 2007 levels, creating three straight years of decline.”
Contrary to what you may hear from bullish or optimistic real estate industry guru’s the state of our national economy, credit crisis, high housing inventories, fall of the sub-prime market, closing bank lending operations and finally a lack of an effective energy solution to soaring gas prices will continue to plague the minds of credit worthy buyer’s and keep them from purchasing a home.
In most markets we are seeing increased inventories due to continued foreclosure. In Tennessee alone at the start of 2nd quarter 2008 we saw foreclosure housing inventories totaling approximately .66% and at the end of 2nd quarter it was up to 1.53%, which is a dramatic jump. To put this in perspective, this jump equates to almost a third of the entire housing inventory across the state.
As you can imagine, with this much inventory on the market, housing prices are falling. Comparably, Tennessee hasn’t suffered nearly as bad as other states like, California, Florida, Nevada and Arizona however, try telling that to the homeowner here in Tennessee who is out of a job and has found work in another state. Not to mention, if he bought his home in the past 3-5 years, he may not have enough equity in the home to sell it for the amount owed due to falling home values. Short sales or even foreclosure becomes the only solution for many.
So, if you are ready to buy and are credit worthy, deals are out there to be made! Buyer’s can afford more home now than they have been able to in the past 5-7 years. If you plan on staying in the home for at least 5 years, most likely you will be able to weather out of this real estate storm and end up big winner when ready to sell. If you’re looking at purchasing a home now and may end up moving in the next 24-36 months, you might be off better to rent. In my opinion, it is going to take 2-3 more years before we see the light at the end of this tunnel.
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