It’s the 10 trillion dollar question and there are quite a few opinions:
Over this past weekend, former NAR Chief Economist John Tuccillo posted a weblog entry (“Is the End in Sight?”) with a good analysis of several factors in the current economy and housing market. He seems generally hopeful.
Here is one of his conclusions: “Your potential buyers need to know that their window is closing and that when sales begin clearly to rise, prices will soon follow. In 2005, sellers didn’t want to believe that and were left behind. Now, it’s buyers who are in danger of watching the train leave the station.”
Generally speaking, I semi agree with this statement as long as he is referring to residential real estate only and only in the top 25 growth markets. We all know that the commercial real estate market still has a long way to go just like the top 25 attrition markets like Detroit and Las Vegas.
But, I have to temper the above opinion with this: I think that the “other shoe” is about ready to drop in the mortgage and banking industry. A ton of option ARMs are within 18 months of adjusting as are several thousand of those super enticing entry balloon programs. Unless these property owners take advantage of refinance programs like the HASP program, I think that we might be ready to see the other half of this losing football game.
My prediction for the Nashville real estate market: We are near the bottom, very near in fact, but won’t reach the bottom until the end of this selling season. Builders, developers and individuals have for the most part stopped building spec homes and banks, lenders and hard money institutions are beginning to loosen their lending qualifications in this market due to our strengthening fundamentals. This simple supply, demand and buyer ability curve appears to finally be turning in our favor.