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Quick Thought on the Real Estate Market

First off, if you have checked here at all lately, you know I have not been writing at all for the past couple of months. We are in the process of creating our firm web site. Once that is done and live, I will start writing again. That being said, I was reading this morning a blog post about the newest new home sale report and it raised one issue which I do not believe has been reported and I think will be useful to keep in mind.

Most housing statistics are reported on a year-over-year basis. For example, this March is compared to March 2008. Anyone who is following the economy and real estate and general would fully expect that the most recent batch of home sale statistics to be AWFUL. This is because virtually no activity was occurring from last October through February or so. As a result of the general economic shutdown, there were no (not no but you get the gist) closings from December 2008 through the end of March. The result is headlines like "new home sales down 30.6%." Such dire headlines create negative sentiment, i.e. things are getting worse, not better, which leads Buyers to delay offers and purchases (thinking they can get better deals if they wait).

So, here's the catch....the same effect is going to work in reverse as we get into late 2009 and early 2010. As the credit markets slowly unfreeze, and the government bailout money gets into the economy, there should be a general stabilization (not necessarily improvement) of the economy. Even if there are historically low levels of real estate activity late in the year, that activity will be an improvement over late 2008 and early 2009. This will lead to headlines like "housing sales up 40% over a year ago," which will lead to an improvement of sentiment and therefore, I predict, a significant improvement in the real estate market.

In short, I think we are getting close to a bottom in the market.

(Big caveat, this is one person's opinion and should not be relied upon in making individual decisions. Please read the disclaimer to the left.)

Categories: Real Estate

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Bayer & Black, P.C. - Fairfield County Attorney

Wilton Office

195 Danbury Road, Suite 160
Wilton, CT 06897

Danbury Office

153 White Street
Danbury, Connecticut 06810

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195 Danbury Rd., Suite 160 P.O. Box 459 Wilton, CT 06897