Lawrence Yun, the chief economist for the National Association of Realtors, is predicting a slow emergence from the current regional housing slump.
Citing a current sales pace that is down 20 percent from a year ago, and a decrease of 30 percent from the peak year of 2005, Yun predicts a gradual pick-up in consumer confidence throughout the remaining 2008 market, and a continuing trend through 2009.
Yuns figures also show an average 30-year conforming fixed mortgage interest rate of 5.7 percent through 2008, with an up-tick to 6.3 percent in 2009.
Area home prices are down by 1.2 percent, according to the study, but show an increase of 3.2 percent in value in 2009. In addition to the increase in value, Alexandria City and other close-in sections of the D.C. metro area are almost assured of increased market activity in 2009, when the federal government welcomes a new administration to town.
Sellers can expect an increase in jobs by 1.6 percent this year, inching up to 2.2 percent next year, according to the study. Home sales activity will be at 5 percent this year, inching up to an increase of 8.3 percent in 2009, with home prices down by 1.4 percent this year, and increasing by 3.7 percent in 2009.
New housing starts are forecast to continue to be in the negative column, compared to a year ago, and are down by 20.1 percent in 2008 to date, and predicted to remain at 1.3 percent in 2009.
While existing home prices are down by 1.2 percent in the area, Yun forecasts they will appreciate up to 3.2 percent in 2009 good news for qualified buyers able to take advantage of market uncertainty to bargain in the current housing market, while still accessing historically low interest rates below 6 percent
The study shows home prices averaging $398,600 this year, but increasing to an average of $413,400 in 2009. Once the government stimulus package and mortgage accessibility is enhanced through reform of the Federal Housing Administration, more buyers should be coming to the table. The proposed reforms being hammered out in the halls of Congress will provide relief for some cash-strapped homeowners, and welcome others to the housing market.
Those qualifying for loans guaranteed by the Federal Housing Administration (FHA), for example, can purchase a home with as little as three percent down payment which can be lent to the purchaser to qualify, or be provided by a charitable organization.
Additionally, the FHA loans will have favorable interest rates, because like Fannie Mae and Freddie Mac, they enjoy the implied backing of the U.S.
Government. And for those who are currently in financial trouble keeping up with their current mortgage, a look at what FHA has to offer would be a smart move.
FHA is administered by the U.S. Department of Housing & Urban Development, which also has oversight responsibility for Fannie Mae and Freddie Mac. Program information can be obtained by logging onto www.federalhousingadministration. gov.
Together with the lifelines being crafted in Congress for troubled homeowners, and the enhanced access to favorable loan rates to many who would be unable to qualify in the private market, the empowerment of home ownership will be realized by many who have been waiting on the sidelines, lifting the overall market along the way.