The 2008 Housing Market
Most areas have seen declines in home values during 2007. In fact, according to the National Association of Realtors, in 2007 existing home values have decreased an average of 1.4 percent. However, in 2008 the median existing home value should increase by 1.8 percent. So what does this mean for homebuyers?
Well it means several things. First it means that buyers looking for a new build are most likely to get a better deal in 2007 than 2008 before inventories have decreased. Second, it means that buyers are able to dictate more of the terms of a transaction. This means you can not only get a better price on a home, but that you should also be able to negotiate other incentives such as having the seller pay a portion of your closing costs.
And more specifically for first time homebuyers, this information means that 2007 might be the year to buy a house. Because home values are slightly down but expected to rise, 2007 is a good year for many first time home buyers. Furthermore, interest rates are still at historical lows even though they have risen over the past year.
The 2008 forecast also has implications for people thinking of buying a vacation or investment property. Buying a second home is a big decision that should not be rushed. But you also want to make a prudent decision and get the best deal. So for those thinking of a second home, it might be time to sit down with your mortgage broker and map out a strategy and then start looking.
By 2008 prices should start going back up. The main reason for this is that many new home builders are reducing their inventories and will continue to do so throughout 2008.
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