So, what does the future hold for Hampton Roads real estate in 2008? Here are our predictions:
#1 Sales will remain relatively flat. Given the record numbers in the past few years, a flat market is not a bad thing. The pace will be steady enough to begin to whittle away at competitively priced inventory, as new listings coming on the market will slow somewhat in 2008. Average market time will increase slightly, but the market will continue to move toward a balance between buyers and sellers.
#2 Interest rates will remain low. Although there may be some fluctuations during the year, overall rates will hover in the 6% range. The combination of election year influence, and the key role that the housing market plays in the overall health of the economy means that the Fed will most likely ensure that rates don't tick up too far.
#3 The mortgage market will see a few more major upsets before beginning to settle down toward the end of 2008. I don't believe we've seen the end of major players going under, primarily because certain segments of the country haven't experienced the worst of the downturn yet. It will be more important than ever that buyers use reliable local lenders, and ensure that loan commitments are in writing. As mortgage companies pick up the pieces, we will see new products available to replace many discontinued programs; however, loans will continue to be credit score driven, and the sub-prime market will continue to decline.
#4 Foreclosures nationally will see major spikes. Fortunately, our local market will not feel the worst crunch of this, because of a stronger than average local economy. We will, however, see a steady rise in REO inventory, and a renewed supply of VA and HUD foreclosures. This will result in a surge of investors in the market, which were absent in the recent sellers' market. This is a great opportunity for both investors and Realtors who are skilled in the investor market.
#5 Appreciation will see modest gains. This is great news for sellers, who will be able to capitalize on major price gains in the past 5 years. The key will be to be realistic about pricing, and invest the effort in making sure that listing inventory is in tip top shape. This is sort of an enigma of the current market, and a sign that the foundation of our local real estate market is still strong, despite the slow down in sales.
#6 2008 will be the best buyers' market that we have seen in years. The combination of substantial inventory, nervous sellers, and low interest rates means great deals for savvy buyers. Even those buyers who have homes to sell in order to move can capitalize on good opportunities.
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