\u00a0<\/p>\n
There are five major factors\u00a0that are\u00a0significantly affecting the real estate market.\u00a0<\/p>\n
The first is UNEMPLOYMENT.\u00a0 There are 12.5 million people on unemployment according the Bureau of Labor Statistics.\u00a0 There are 8 – 10 million who have fallen off the charts or are underemployed.\u00a0\u00a0Seventy percent \u00a0of the economy is consumer driven and 20% of the GDP is related to real estate.\u00a0 People who want to buy homes can’t unless they are employed with a savings account.<\/p>\n
The second is CONSUMER CONFIDENCE.\u00a0 It is currently bouncing somewhere near the bottom.\u00a0 On a national level, home ownership never lost value from the time of the Great Depression until the time of the Great Recession.\u00a0 We are struggling to prove that the owning a home is still the American Dream.<\/p>\n
The third is INVENTORY OF HOMES.\u00a0 There are 3.5 million homes listed for sale.\u00a0 In the 10 years trailing the average was 2.5 million homes; there are 30% more homes for sale today.\u00a0 There has to be an absorption of homes currently for sale before new construction can begin.<\/p>\n
The fourth is SHADOW INVENTORY.\u00a0 In 2008 there were 1.8 million foreclosures.\u00a0 In 2009 there were 2.1 million foreclosures and in 2010 it is predicted that we will see somewhere close to 2.9 million homes in foreclosure.\u00a0 25% of all mortgages are underwater and out of 55 million mortgages, 8 million are 90 days or more in arrears.<\/p>\n
The fifth is GOVERNMENT STIMULUS AND SUPPORT.\u00a0 We saw a “false” high which was provided by the tax credit and low interest rates.\u00a0 Without continued support many people believe that we we see a sharp decline in home sales beginning in May, 2010.<\/p>\n
I believe that we are at the beginning of the end of the real estate slump and the climb is going to be slow.\u00a0 The long term road to recovery is going to be considered the “new normal” according to real estate experts.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u00a0 There are five major factors\u00a0that are\u00a0significantly affecting the real estate market.\u00a0 The first is UNEMPLOYMENT.\u00a0 There are 12.5 million people on unemployment according the Bureau of Labor Statistics.\u00a0 There are 8 – 10 million who have fallen off the charts or are underemployed.\u00a0\u00a0Seventy percent \u00a0of the economy is consumer driven and 20% of the<\/p>\n