By Carol Hazard, Richmond Times-Dispatch, Va., Oct. 16, 2009
The housing sector has hit bottom and probably overshot it, the chief economist for the National Association of Realtors said yesterday in Richmond.
“We have seen signs of life developing in the housing market,” Lawrence Yun told about 160 real estate professionals at The Jefferson Hotel in downtown Richmond at an economic-trends event sponsored by the Richmond Association of Realtors.
Yun said he wasn’t ready to say housing has recovered. But the declines are less severe. And any housing rebound should lift up the broader economy.
He predicted that the housing slump in the Richmond area would end in the next six months, if Northern Virginia is a leading indicator for the rest of the state.
Multiple offers are being made on some properties in Northern Virginia, where prices rose sharper and fell harder than they did here.
“We are seeing good signs in Northern Virginia. Maybe they will filter down to the rest of the state.” He said that given that the housing situation is fragile, it would be a pity if the federal $8,000 tax credit for first-time homebuyers expires as scheduled Nov. 30. He said Congress should extend and expand the program.
A danger is the housing sector could roll downhill again if the right steps are not taken, Yun said.
This year marks the fourth year that housing has been in a recession — “it was the housing market that brought the economy down” — and the second for the economy as a whole. “It’s been very tough,” Yun said.
However, pending home sales nationally — a sign of future economic activity — have risen for six consecutive months. Also, the number of buyers has increased in the same time period. “Clearly, we have established at least a bottom,” Yun said.
Housing prices here and elsewhere are lower than they probably should be and housing affordability is at an all-time high, meaning more people can afford to buy houses, he said.
He predicted that new-home sales nationally probably would remain weak for 12 months. However, home-building levels are so low that demand eventually will rise. Plus, the inventory of lower-priced houses is insufficient, he said.
Yun said foreclosures will continue to rise, but unlike last year, when foreclosed houses lingered on the market, active buyers are snatching up these homes. Foreclosure activity in Virginia rose 4.1 percent from July through September from the same period a year ago.
For the past two to three years, potential homebuyers have sat on the sidelines not ready to buy if prices were heading lower, Yun said. Many still lack confidence about their jobs to buy a house and get deeper in debt, as the national unemployment rate continues to rise.
Yet that sentiment has changed in some locales, such as San Diego, from not wanting to buy to not wanting to miss a golden opportunity, Yun said.
Link to Article/Publication
Social poster
Downloads
- No documents for download.
Track comments via RSS 2.0 feed. Feel free to post the comment, or trackback from your web site.
Currently there are no comments related to article "Expert Sees Richmond Area’s Housing Slump Ending in Six Months".