Looking Forward to 2009
Information in part extracted from Sarasota Association of
Realtors Magazine and other sources
Posted January 24, 2009
Yep! The current economic crisis has everyone concerned and that same concern is felt heavily in the real estate industry. It has been said that "when the economy catches a cold, the real estate industry gets
pneumonia." But it is also noteworthy that where there is trouble, there is also opportunity.
As 2009 begins, it looks as though both the Republican and Democratic sides of Congress will agree upon a very sizeable economic stimulus package. The National Association of Realtors has also been lobbying for a reduction in mortgage interest rates to 4.5% as a way to stimulate the housing market.
Once the stimulus package, whatever it's eventual form, is in place, recovery can begin. In the metropolitan Sarasota real estate market, short sales and foreclosure activity increased dramatically in 2008. "Once these distressed properties are sold, we'll move into the next phase of the recovery," says Bill Geller, Sarasota Association of Realtors president.
"Sarasota remains a very attractive real estate market particularly with the lower prices on some very high quality properties."
Richard Bove of Ladenburg Thalmann, an investment banking company, sees a positive dynamic taking shape in the current cycle. The federal government has intervened aggressively
in the markets pushing interest rates down -- most notably in the home mortgage sector. Though it takes awhile for low-cost money to begin having its effect, Bove said he expects “housing prices to stabilize and/or rise (in 2009) as interest rates fall and loan applications increase.”
Add in the massive economic stimulus package being put together on Capitol Hill with the Obama administration, and there's a good chance we're going to see a gradual transformation of the downward cycle into a slow rebound over the coming several quarters.
Already there are positive signs of the turnaround Bove predicts:
- Mortgage applications are off the charts, mainly for refinancings but also to buy houses at affordable prices.
- Interest rates continue to hover at 50-year lows - 5% and even 4 3/4%
- We're paying much less at the gas pump, and sharply discounted prices for retail goods and autos are allowing Americans
to actually begin saving once again.
These may not seem like big deals individually, but they are hugely important as potential first indicators of a new trend.
Sarasota has an extra, and very important, advantage over many other areas of the country. Sarasota is not nearly as dependent on local employment as many other areas. In addition to its attractiveness to retirees, many investors, both domestic and foreign, find Sarasota an attractive
place to invest their cash in real estate properties. After two down years in a row in both sales volumes and with prices lower than they have been in several years, there is growing pent-up demand that gives the year 2009 a real chance to get the Sarasota real estate market back on an even keel, maybe even on an upward trajectory
once again.
The National Association of Realtors® (NAR) predicts that the 30-year fixed-rate mortgage is likely to rise gradually to an average of 6.3% in 2009. When prospective buyers see interest rates starting to edge up, they are likely to
react positively. Until now they've been thinking that prices can go even lower. But when they sense that interest rates, now at historically low rates, have bottomed out and are starting back up, many will decide that 2009 is the time to
make their move.
The NAR reported that sales of existing homes posted an unexpected increase in December, 2008 as bargain hunters snapped up foreclosures in California and Florida. Here in Sarasota, Bill Geller has even begun to notice "multiple offers" on the most attractively priced, high quality properties.
The net of all this is that while, in some parts of the country, the real estate industry is still in serious trouble, Sarasota real estate prices are beginning to firm up.
If you have been debating whether or when to invest in Sarasota Florida real estate, now is the time to contact a competent Sarasota Realtor. Don't
miss out on this unique Sarasota FL real estate investment opportunity.
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