Lets be Optimistic about Real Estate

This week brought some peculiar behavior in the real estate market which led to conflicting reports and opinions as to whether we’ve reached a turning point.

The past few Saturdays have been buzzing with real estate shoppers. Realtors from Provincetown to Orleans reported that the combination of scheduled showings, walk in inquiries and busy open houses, were reminiscent of a stronger market. The weather cooperated as well.

Mortgage brokers reported that although the majority of their traffic is refinance business, the number of buyers seeking pre-approval letters, are increasing.

The Boston Globe reports that home values slipped an average of 15% in Massachusetts since the market peak in 2005. This is not a tremendous slip compared to other states which saw a 50-60% decrease in value. Outer Cape property is in line with the rest of the state experienced an average 10-20% adverse adjustment in value. The Globe also reported that sales have consistently increased over the past three months, although by a small margin.

It’s hard to predict when the curve will turn upwards, but here are some significant signs that momentum is building for something to happen:

1. Pre-approved buyers are shopping. Getting a mortgage these days is not an easy thing and going through the process shows commitment to buy.
   
2. The interest rates remain historically low.
   
3. Low prices are creating extreme opportunity.
   
4. Closed sales in the hardest hit markets of Phoenix and South Florida have already increased three months in a row due to the purchase of foreclosed properties and short sales.
   
5. The Housing stimulus package is helping sellers keep their homes and avoid slipping into foreclosure or listing their homes at fire sale prices.

Stability may be returning to the real estate market. Although there is a long road ahead, it appears that there is change on the horizon.