A few moments ago, The Washington Post published a story featuring executives from Radar Logic, Inc., and Zillow.com… who suggest that—and explain why—they believe real estate prices will fall another five to seven percent, and then begin to recover (nationally) toward the end of 2011.
As primary reason for this forecase, both guests point to plentiful supply (more homes available that demand for housing) and high unemployment (making people cautious—or incapable—of committing to major purchases or plans). Click here to read the story, or, click here to watch the video (commercial pre-roll required).
Implications: First, it is important to remember that this is a forecast which could be influenced by unforeseen events (an accelerating recovery, a slow-down in the recovery, etc.). Also, note that national trends don’t always reflect local realities. The real estate market in your metro area could behave dramatically different than the national market. I’m told the real estate market remains comparatively resilient in New England, for example, while it remains frustrating in places like south Florida and Arizona.
It’s important to look for tools that help you keep abreast of what’s going on in your area… like this Washington Post graphic that helps you monitor unemployment rates by county (click to link).
Finally, note that even in adversity, there is opportunity. If people are not shopping for their next dream home, are they considering home improvements, home theatres, new appliances or new furniture to make their current house the home of their dreams?
I think so.
Mike Anderson
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