The 2010 United States Real Estate Market at a Glance

While some areas of the country will continue to encounter difficulties with the economy and their real estate market in 2010, there are some encouraging signs that the nation’s real estate market is improving. Since housing prices have recently decreased, we are also entering a period where homes are more affordable than they have been in almost twenty years, making it an optimal time to buy.

There are markets that are showing signs of improvement and recovery. Approximately 44 cities are predicted to show appreciation this year, which exceeds totals over the last four years. Almost all of the nation’s markets will become more stable as buyers begin to purchase the surplus inventory of homes.

WHY HAVE PRICES FALLEN?
A high number of foreclosures and bank assisted short sales is causing an increase in housing supply on the market. High unemployment is contributing to a weak economy. The U.S. economy was diminished by 2.4% in 2009, its worst performance in decades.

WHERE ARE MARKETS STRONG?
High employment rates are the best indicators of strong housing markets. The best real estate markets have strong regional economies. College and university towns also perform well in a weak economy. Enrollments tend to rise during bad economic times, and the local economies in these towns benefit from the increased enrollments.

SIGNS OF IMPROVEMENT
In a report issued in February, the U.S. Commerce Department stated that new housing starts in January 2010 rose to their highest level in six months (see www.census.gov/const/www/newresconsthist.html). Sales of existing homes and condominiums also increased in 3 out of 4 regions in the country- up 10% in the Northeast, 9% in the West, and 1% in the South. Real estate sales increased in 48 states and the District of Columbia in the fourth quarter of 2009 and showed double digit increases in 32 states. Total sales were up by 14% in the 4th quarter of 2009.

SHOULD I CONSIDER BUYING NOW?
The National Home Builders Association and Wells Fargo have presented a report stating that the Housing Opportunity Index (HOI) shows that 70.8 percent of all new and existing homes sold in the fourth quarter of 2009 were affordable to families earning the national median income of $64,000. Conditions such as lower housing prices, lower mortgage interest rates, and two federal housing tax credits available to first-time and repeat purchasers are making homes more affordable now than at any time in nearly twenty years. Consult with your realtor today and learn how you may benefit by purchasing a home.

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