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September 14th, 2009 at 2:17 pm

5 Indicators That the Real Estate Market Is Recovering

Slump.  Recession.  Downturn.  These seem to be the only words we’ve been hearing for the past few years when talking about the real estate market.  Are you as tired of hearing them as I am?  Good.  It’s time to look at the bright side and discuss some indicators that the real estate market is recovering.  It won’t happen by tomorrow, but we could soon be talking about an upswing.

  • Home prices are not declining as quickly.  In recent months, they’ve either remained steady, gone up a little, or seen only a slight drop as opposed to the common major falls of the past.  This is a good sign that consumers are purchasing homes again, rolling money back into the market.
  • At the same time, home prices have not witnessed a huge increase.  This side is even better for the consumer; it has become easier for many people to afford homes.  While rising unemployment rates threaten the affordability from the other side (and keep the possibility of foreclosures near), the fact that prices have remained relatively steady offer a positive promise for the real estate future.
  • With prices low, the people that can afford to buy homes are actually buying them.  One big help has been the first-time homebuyer tax credit.  People that are buying their first home can receive up to an $8000 tax credit that does not have to be repaid.  If you are in the market for a new home (excuse the pun), do not forget to take advantage of this!  It’s only available through December 1, 2009.
  • Even though credit requirements have become stricter due to the high number of recent foreclosures, interest rates have remained low.  This equates to more affordable loans for new homebuyers, as well as a great opportunity for many people to refinance their current homes.
  • Foreclosures are still common.  This may seem like an oxymoron; yes, foreclosures are a negative occurrence for all involved parties.  However, foreclosures mean even lower home prices, opening up the possibility of homeownership for even more people.  These properties account for about 1/3 of home sales.  Without the low prices that come with them, home sales would not be rising.  Of course, low foreclosures would be a better sign of recovery, but for now, the fact that it equals a low price and a home sale stands to push the market in the right overall direction.

These indicators may be only small glimmers of hope that the recession will end, but a positive outlook is always beneficial.  If these signs can become a solid base to build upon, perhaps we can eliminate the words “slump” and “downturn” from our vocabulary.

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  1. Tax Credit for buying a home


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