Where is the housing market headed? That is a question we ask ourselves daily as the turmoil from Wall Street to Broad Street shakes the fabric of the American Dream. According to Lawrence Yun, NAR Chief Economist, “Home sales continue to edge up and down. Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings.” Mr. Yun goes on to say that the recent action by the federal government in “taking over” the two GSEs could be the shot in the arm that the housing market needs.
Another factor is the attractiveness of FHA-mortgages, according to Mr. Yun. He states that FHA is taking a more active role in serving a broad cross-section of home buyers, but it will take some time to fully get up to speed. “There’s been a surge in FHA mortgage applications. Interestingly, many people in high-cost areas aren’t familiar with FHA programs.”
Mr. Yun points out a weekly (daily) mantra on my blog and in my columns that all real estate is local, but he reminds us all that economic conditions are also local. The speed and timing of a housing and economic recovery depends on local market conditions. He notes that based on local market fundamentals, he expect robust home price growth over the next two years. He sums up his economic and housing report by stating that nationally, home sales are stable now but are expected to increase in coming quarters.
As far as local market conditions are concerned, quoting from a Market Analysis Report of Athens, GA I obtained recently it would seem we are somewhat sheltered by the University of Georgia being located right here in Athens. It states, “the University of Georgia has been the foundation for the community for more than two centuries. It goes on to point out that the university is a stabilizing factor in the economy. It notes that even during recession the area is not as severely affected as other areas of the country due to a large portion of the labor force either employed by the University or dependent upon the University.” Luckily for us we are not in “ground zero” areas such as Florida or California that had truly ridiculous run ups in home values in previous years. Right now local real estate is more affordable than it has been for years. Now all it takes is for the level of inventory to be sold down through financing opportunities such as through FHA and this market will be back in order again.
