Home prices and the economy as a whole continues to decline, but the National Association of Estate Agents (NAEA) has pointed out that in recent months there has been a small increase in activity with potential buyers and sellers in the market, which may differ from the rates. Has there been an increase of those who try to buy a house and the number of new properties on the market?
We will look a little closer at the statistics on houses sold. Out of all houses sold, 11.2% were first time home buyers. Furthermore, the average sales per real estate agent has upticked for the first time in many months. In certain areas of the United States, the price of houses have even increased a little. People searching for a house rose from 180 per agent to 205. The amount of houses each real estate agent was selling increased from 84 to 113. The number of sales per real estate agent rose from 3 to 8.
In a recent survey, over 60 industry analysts were asked if now was a good time to buy a house. 60% of those analysts believe that now is the time to buy a house. The main reason they give is that interest rates are very likely to stay low for the remainder of the year. Indeed, low interest rates are the single most important factor in determining the number of home sales. It is both low interest rates and low prices that will continue to pull more buyers into the market.
40% of industry analysts surveyed feel that it is too early to buy a house. They believe that the price of houses will continue to drop. The reason they give is that unemployment will continue to remain high. Even more workers will worry about job security. The banks will continue to reduce credit lines and make fewer home loans. Capital Economics forecasts home prices to fall another 20% before a bottom is reached in late 2009 and early 2010. A small amount of extreme analysts expect home prices to fall all of 2009, 2010, 2011, 2012, 2013 and finally bottom in 2014.
Overall, the consensus is that you should not feel rushed to purchase a house. The country continues to be in a recession and unemployment is continuing to rise. With the banks continuing to make fewer and fewer home loans as they tighten credit, the demand for houses will remain low.
The idea that a house is a good investment continues to be called into question as house prices fall. The housing market currently favors very low prices and homes that are priced to match the market valuation will be sold quickly. There are good deals on homes in 2009, but one may find even better deals later in 2009 and into 2010.
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Tags: business, business and finance, Finance, Real Estate, rentals
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