Optimism Balanced with Facts
What's holding you back?
There have been many reasons cited in the media over the past couple of months for waiting to purchase a new home. Unavailability of financing, fear the market will continue to decrease a home’s value, looming unemployment increases, continued foreclosures.
The majority of reporters and politicians don’t pay enough attention to an important cause of our current market condition- the public’s perception of the market. This perception is what drives consumer confidence. And consumer confidence is what drives the economy. If the media tells you the market is tanking, then you believe the market is tanking. So you retrench, pull back your spending, save your sheckles, don’t buy that GI Joe with the Kung Fu Grip for your kid at Christmas… You get the picture.
On Tuesday, in his inauguration speech, our new president voiced a fact that has been completely overlooked by our journalists.
“This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished.”
The Tri Cities has indeed been relatively blessed during this period of economic setback. We remain highly employed, even compared to the rest of the state, let alone the nation as a whole.
But let’s look at just the real estate market here.
Through the week ending January 17 of this year, Tri City real estate has seen 41 sold or closed home transactions. That’s for11 bank days by the way. That translates into almost 4 homes per day. And bear in mind this is January, and any Tri City realtor will tell you that January is when you spend time planning for the upcoming year because it’s an industry standard that this is the slowest month of the year for transactions. The average sold price for December 2008 (the most recent figure available) was about $189,000.
If the sold’s figures stay this way, we’ll actually see an increase in activity from this time last year.
The more important factor is the availability of excellent credit. In-house financing with HAPO credit union, with a point of origination, was quoted to me this morning at 5.5% on a 30-year fixed rate mortgage. Shopping might even find a better rate.
C’mon people! 5.5% fixed??? I remember the last downturn in the economy. My family was buying rentals in Richland and happy to get 12% financing!
Our local economy is projected to remain strong and our employment predicted to continue at its currently solid figures. The new administration is pro-science and the choice for energy secretary is pro-nuclear.
I spoke this morning with Dean Schau, Regional Labor Economist and professor of economics at Columbia Basin College. Regarding the forecast ahead in the Tri City real estate market he said:
“The market never really bubbles here, so there’s no reason for a burst to occur”
He went on to say, regarding consumers’ lack of confidence in the market and its’ affect:
“Consumer lack of confidence is why we saw consumer spending on durables down 33% last year.”
We are predicted to see another year of steady increase in housing values ahead in the Tri Cities, and excellent rates on mortgages.
It really is a good time to be shopping for a new home here.
[where: Richland, WA 99352, Kennewick, WA 99336, Pasco, WA 99301]
