Balancing Act

You probably are already aware that the real estate market is in a downward spiral and you might suspect that the end of this sputtering market is nowhere in sight. Well if you do, you are in good company because the Mortgage Bankers Association also believes we have a ways to go before the suck is gone.

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Yes, it appears that the real estate market is going to keep stinking it up well into 3rd Quarter 2008. The MBA thinks the fun could last even longer if the credit markets fail to restore confidence.

In other words, do not hold your breath.

The MBA’s chief economist, Doug Duncan, indicated that the housing slowdown has had and will have a major impact on the national economy.

Why all the sad faces?

Existing-home sales for 2007 are expected to be down 12% from last year. In 2008, sales are expected to decline another 10%.

New-home sales look even worse. For 2007, the drop in new-home sales is 22%. It is expected that sales will decrease another 10% next year.

Perhaps it is not all bad. These disappointing numbers make this a buyer’s market. If you are a buyer you may be able to use this time to your advantage. This drop in sales has created a 2% decline in median house prices. This is expected to repeat again in 2008. This drop in price means there might be some good purchase opportunities in 2008 along with motivated sellers who are looking to get out from under their mortgage payments.