5 Predictions for 2008-2009 | Real Estate Forecast | The Good and The Bad

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2008 and 2009 National Real Estate Predictions

NAR is projecting an increase in sales for existing sale in 2008. Unfortunately new home sales are unlikely to rise before 2009.

More Buyers Pulling the Trigger in 2008

The NAR chief economist, Lawrence Yun, forecast that the lack of sales in 2007 shall lead to more activity in 2008 from those who postponed their buying decision due to the mortage industry turmoil.

Appreciation Back To Normal in 2009

In addition, Lawrence forecast that appreciation will return to the norm of one to two points above the rate of inflation in 2009. This typical means appreciation of 4% - 5% a year.

Plan To Hold Onto Your Home For At Least 2 Years

At normal appreciation rates it usually takes a seller 1.5 – 2 years in a home to be able to sell and break even after closing cost. So there should be a good deal of inventory on the market until 2010 at least.

Investors Will Be Buying Again

Once the 4% - 5% appreciation has been established we should see more investors coming back into the market. This should help take off any surplus homes and lead to a quicker “normalization” of the market.

Interest Rates to Rise Next Year

The 30 year interest rate is expected to increase to 6.4% by the end of 2008.

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