Palm Beach Real Estate and Loans

While my readers know that I typically focus on Palm Beach Gardens real estate and home loans, this morning its time to take a look at things on a national scale.  

This morning I recieved an email from Chris Griffith with a link to an article that had just come out in the Wall Street Journal.

Theres nothing like starting the day off with great news-

˜The Housing Crisis is Over by Cyril Moulle-Berteaux was a well thought-out piece that explains in great detail why the worst may be behind us.

It starts with:

˜The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market.'

While ˜bottom may sound ominous - dont forget that the decline has to stop before the recovery can begin, so the bottom is exactly what weve been looking for.

The ˜Boom that we experienced a few years ago was fantastic for those people who were skilled (or lucky) enough to buy low and quickly sell high.  But it also had the negative effect of making a home purchase way too expensive for many people."

It was inevitable - the Boom went Bust.

˜Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s."

When you combine the fact that homes are becoming more affordable with the declining inventory of available properties, you see that the price declines are likely to turn around in the next few months.

'In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.'

These improvements dont just mean an improvement in the real estate situation -

'This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.'

I suggest reading all of Mr. Moulle-Berteauxs article here.

It is very rare to read good news these days about the real estate industry.  The majority of the media seems to delight in doing their best to report - or construct - information that does nothing but help to spread the negativity.  Why? Because negativity sells - newspapers that is, not real estate.

I feel like this WSJ article will go a long way toward convincing people that things are - or are about to - improve.

Real estate is cyclic - but when things are bad it's sometimes hard to remember that.  We cant fix what already happened, but the future is looking pretty bright.