Over the last number of years, veteran market watchers(those over age 40) always wondered when the local real estate boom would end. My answer was "when the rates go up considerably or the jobs disappear." As recent job losses and layoffs have unfolded, we've once again discovered real estate markets are cyclical. The local market has shifted and a buyer's market will be in full bloom by spring. I suspect that had the federal government not allowed $0 down and 40 year amortized mortgages that the correction would have occurred sooner. I remember in 1990 when predictions of a recession and real estate prices dropping 25% caused a great deal of denial and still it happened. It looks as though 2009 will bring those same sentiments.
For 2009, I project sales to mirror results from November and December 2008. I anticipate sales of approx. 3725 residential properties making this the lowest total since 2000. I expect prices to drop in the range of 10-15% by year end driven by those who are overextended financially and have to sell. Certainly not great news but grim reality nonetheless.
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