The National Association of Realtors Predicts Recovery in 2009!

The Real Estate Recovery - Insights into tomorrows' market today!

Enter your email address to receive notification when this article is updated.

On December 23rd the National Association of Realtors released its forecast for existing home sales. According to NAR, sales of existing homes fell 8.6% in November nationally. The new home sales index was down 5.3% from the prior month. Meanwhile their housing affordability index rose 6.5 points to 141.8. The affordability index takes into account the price of homes, interest rates and other economic factors to determine just how easily a typical family can purchase a home.

Consider the difference between wages paid in California versus North Idaho. Although California wages are typically much higher, the ability to purchase a home in CA is much more difficult than it would be in North Idaho, despite the higher wages. In a similar fashion NAR looks at the ability of people to afford homes in the areas in which they live. In this regard the affordability index is an extremely good indicator for buyers who are wondering when they should enter the market.

As we have mentioned in previous reports, the housing affordability index peaked (was most favorable to buyers) in the third quarter of 2008. Despite the credit crisis and other factors, the combination of low interest rates and bottomed out prices was encouraging for buyers. Tax credits available to first time home buyers also helped. But NAR projects that the affordability index will remain relatively flat in the fourth quarter of 2008 and the first quarter of 2009. Then, interestingly, right before the first time home buyer credit expires, the affordability index will be at its highest level for 2009 - with a projected reading of 137 in the second quarter of 2009. NAR then projects that the affordability index will drop off substantially and remain lower in 2010.

These real estate projections would seem to indicate that buyers, who may have been waiting for the 'right time to buy,' may find that the first half of 2009 is the ideal time to buy in terms of affordability. Indeed, NAR projects that home prices will begin to increase significantly in the second half of 2009.

Indeed, from number of units sold to price increases to the ever important affordability index - NAR projects that the recovery will take hold in 2009 and that buyers who wait more than two quarters will likely spend more money or be forced to buy less home for the same money. Couple that with expiring tax credits and the likelihood of higher mortgage rates and it seems clear that savvy buyers will act sooner rather than later!

Contact your North Idaho Agent today at 208-666-6264 or by completing this online form.

Overall the report from NAR is encouraging as agent's have been hoping for a bottom for quite some time now. The signs of activity can certainly be seen at the Tomlinson North Idaho Sotheby's office in beautiful Coeur d'Alene, Idaho. If you are feeling the itch to sell then now may be the perfect time - before everyone else figures out that the bottom may indeed be "in."

Or see the report specific to North Idaho Real Estate here.

Tomlinson North Idaho Sotheby's International Realty knows North Idaho like no other agency! You may also request your free copy of our unique homes and land magazine for North Idaho to be delivered via U.S. Postal Service mail. Just make the request in the comments section on our Real Estate Request Form!

When only the best will do the answer is clear - Sotheby's International Realty

Information obtained from the National Association of Realtors and is deemed accurate but not guaranteed. Some information may be projections or opinions from the National Association of Realtors and may not reflect the opinions of Tomlinson North Idaho - Sothebys International Realty.

A Unique Property from Tomlinson Sothebys

Click here for virtual tour

Click here to contact agent!