First, it’s key to understand that the recent “housing crisis” has been a little over hyped. According to the chief economist for NAR, nationally 2007 was the fifth best year for housing sales ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices over the previous years.
Secondly, even though the national numbers look good, talking about national real estate numbers is about as helpful for the average buyer as talking about national weather patterns. What is happening in our area, New Orleans?
After almost three years of post storm rebuilding, the effects are beginning to show. Many flooded neighborhoods are coming back strong while others are just gearing up. Businesses and schools are reopened and corrupt politicians are getting winnowed out even before our new inspector general has started his investigative job. The population is coming back sooner than expected, and they need places to live.
The immediate effects of the storm combined with the tightening of mortgage requirements made for a softening of our market last year, particularly single family homes and condos. However, as the population has been coming back strong, and as many new young people have been inspired to move into the city, the buyer demand promises to be stronger in 2008, and I see a stronger 2009 where many of the deals will already be bought up.
What does this mean for buyers? With interest rates still at historic lows and the possibility of a strengthening housing market, 2008 could well be the best time to buy.
Next blog I’ll talk about some national indicators for a strengthening market.