Presentation to the Legislative and Regulatory Policy Committee Missouri Association of Realtors® September 25, 2008 Lodge of Four Seasons Jed Smith Managing Director for Quantitative Research NATIONAL ASSOCIATION OF REALTORS® The Changing Real Estate Market Trends and Forecasts
Fluctuating market in 5 million sales range—down from peak of over 7 million.
Existing Home Sales market issues.
All real estate is local: prices and sales levels.
National Economic Outlook.
Addressing client concerns.
Outlook is for a turnaround.
Favorable outlook—but delayed by unpredictable events.
Annual Existing-Home Sales Includes Single Family, Condos, Coops Home sales have retreated back to pre-boom years, which was then considered to be at healthy levels. In thousand units EXCESSIVE BOOM Source: NAR
Recent Monthly National Existing-Home Sales SAAR: A drop from over 6 million to 5 million In thousand units Soft but Stable Sales Source: NAR
25 million more people, 13 million more jobs, reasonable interest rates.
Recovery: Affordability, Housing Stimulus Package, Higher GSE Loan Limits, Lower Inventories of New Homes, Slowing Foreclosures.
Financial problems being resolved.
Prices down 7% this year; up 2.4% next year.
Sales down 11% this year; up 7% next year.
New Housing: 1.6 to 1.8 million houses per year.
Will support a substantial resale market.
Pent-Up Demand ? 2005 2007 Comment Total Home Sales (new and existing) 8.4 million 6.5 million 5.1 million in 2008 Jobs (in October) 133.7 million 137.6 million 137.6 million, 2 nd quarter 2008 Wage + Salary (in October) $5.7 trillion $6.4 trillion $6.6 trillion Household Wealth (3 rd quarter) $51 trillion (3 rd quarter) $59 trillion (3 rd quarter) $58.2 trillion, 2 nd quarter, 2008 Home Prices $219,600 $219,000 $215,000, July 2008 Mortgage Rates 5.9% 6.3% 6.2% for 2008
Using Information from the Realtor® Perspective Addressing Current Market Conditions
What appear to be some of the Key Issues in Addressing Current Market Conditions?
A market where prices have declined, inventories are high, sales are slower.
How do principles of Marketing and Economics apply?
The Realtor® Story
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From the Realtor® Perspective Addressing Current Market Conditions