Today's Real Estate Market

Everyone has an opinion about the real estate market, and what affects sales and prices. A historic view of the housing market indicates that real estate is cyclical, and while the decrease in prices has been large, it is by no means the first time we have had a market downturn. Adverse economic conditions impact the real estate market. Amongst the causes are: inflation; recession; mortgage interest rates; ease of acquiring a mortgage; stock market factors; tax incentives; employment/ job security; and consumer confidence in the overall economy.
Today, we are in a market where many of the above listed situations are working together and keeping the real estate market down. However, probably the most important factor in terms of there being a true turnaround is the public's confidence in job security. Polls/ surveys indicate that the public confidence in job security today is at or near an all-time low. The good sign, however, is that recent corporate earnings reports for the third quarter have been better than most expected. If the news remains promising, there should be a gradual beginning of the recreation of jobs, and the joblessness rate should decline.
Today's 9.8% unemployment rate combined with what's considered the true joblessness rate of approximately 18% has created a wait-and-see attitude among many potential buyers. The government's First Time Buyer's Credit, scheduled to expire at the end of November, helped the real estate market in the last three or four months, but there is presently an uncertainty as to whether or not the government will take any steps to extend this successful program.
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