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Wednesday 27 February 2013

When Will The Housing and Market Begin To Improve?

By Rick Hart


There's no question that the real estate crash of a couple of years gone has put a damper on the whole marketplace. It lead straight to many lost roles abd some industries, like construction, have practically been destroyed by the problems in the home market.

So until people start buying houses again lots of other industries may continue to be slow.

Of course , there are numerous industries concerned in the home market. Not only real estate related businesses like home sellers and mortgage firms, but construction-related firms like home builders, plumbers, floor installers and painters. Also businesses that service those companies like house repair stores or furniture and appliance stores.

Yes there are a large amount of related companies waiting for the home market to recover.

So the big question is... When will the property market get better?

Naturally, it's all tough to predict. So many things must get better. And yes the economy as a whole is perhaps the big culprit.

Companies won't hire till they feel that they have customers willing to buy. Buyers can't buy until they have jobs and cash or at the very least the confidence that more cash is on the way.

So 1 part of the economy is waiting for another which is waiting for another. It's a viscous cycle.

And in many ways, it's all mental. Like somebody said... "We have nothing to fear but fear itself."

Yes a down economy is almost a self-fulfilling prediction. Until people feel more assured they do not take chances on big purchases, like homes or vehicles, or take holidays or perhaps buy large appliances like TVs. Everybody cuts back on spending, which naturally just doesn't help things as it means enterprises don't hire, or worse, go into Chapter 11. Which naturally means fewer jobs.

And round and round we are going.

So everything is related and basically caused by some other part of the economy breaking down.

Take the housing market...

With housing prices so low, many people don't really want to sell because they believe they are losing money compared to what their homes were worth on paper a few years gone. But that implies fewer houses are on the market. And that suggests less sales can happen and that eventually means less sales.

At the moment there are less houses available for sale than there's been in many years. Available houses up for sale essentially went down over 25% in Jan of 2013 compared against January of 2012. And although housing sales and values were better in January of 2013, they might have been much better if there were more homes on the market.

And with the lower housing prices, people with underwater homes are essentially doing short sales to get out from under an awkward situation. This keeps real estate prices low too. Although selling short sales might be helpful in the short run to get the home market past the foreclosure crisis we are still experiencing.

So that you can see, there's many reasons why the housing market has been so slow to recover. It's still almost an ideal tempest of Problems that have to be overcome before we see things back to normal with a powerful home market and overall economy.

So it returns to being patient and perhaps taking an opportunity on buying a little something, just to help the economy.




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