Are We Out of the Woods?

August 18, 2009

Daily Real Estate Updates

sudler-sothebys-logo18 August 2009 ? The major question on most every one’s mind today is?are we out of the economic woods? It is no surprise that the housing market drives the economy. With what appears to be an upswing in home sales lately, most are hoping the answer is, “Yes.” There are a few factors that would indicate that things are looking up. The average home is about a third cheaper than it was at the peak three years ago, a plunge unprecedented since the Great Depression. In the hardest-hit places, such as Phoenix, Las Vegas, and Miami, average prices have been halved or more from their bubble peaks. We have also seen unprecedented low mortgage rates. Once we factor in falling mortgage rates, and housing starts do look cheap by many measures. Thirty-year mortgage rates, at around 5.5%, are still low by historic standards. A few months ago, when they fell below 5%, they were very cheap.

There are a couple of reasons to remain cautious. One, the first time home buyer tax credit of $8,000 will expire on November 30th. Add the credit to historically low mortgage rates and it makes most homes affordable. The Fed has spent billions in helping drive the housing market. The question remains?what happens when mortgage rates rise and there is no longer an $8,000 tax credit?

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About Katie Anderson

Katie Anderson is a respected and successful broker at Sudler Sotheby's Realty as well as a certified appraiser. She specializes in representing clients who purchase and sell condominiums, town homes, single-family homes and income property in the Chicago land area. In her small amount time in the real estate game (she became an agent in 2003) she has assisted in excess of 400 deals and over $200 million in sales and continues to use her skills as a certified appraiser. Katie resides in Chicago's Bucktown neighborhood with her loving husband and 4-year-old-daughter, where she spends much of her spare time with her family and friends. You can contact her at katie@thechicago77.com or at andersonbraack.com

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