The North Fulton Blog

The local market is showing some signs of improvement, but they may be relatively short lived.  There are several factors working against each other which seems to have caused the market to remain somewhat static.  On the one side we have continuing very low interest rates which makes purchasing properties both affordable and attractive.  However, one of the main reasons behind the low rates has been the Fed's buying up of toxic assets to get them off the books of the lenders.  Well that program is scheduled to end on March 31, 2010.  Many believe that in order to attract investors to keep buying these "assets", a higher interest rate will need to be offered.  This will push current interest rates higher making home purchases less affordable and less attractive. 

As you all know, the Federal Tax Credit has had it's intended response: to get more people to purchase homes thereby getting the huge inventory of homes chiseled down and keeping the real estate market moving in a positive direction.  That program is scheduled to end on April 30, 2010.  No one knows how that will affect the market and the continuation of sales. 

We have the continued foreclosure mess with 5-6 million mortgage loan "re-sets" taking place before the end of 2010.  This is apt to dump a whole lot more properties on the market.  The alternatives to foreclosure, mainly short sales and Deeds in Lieu of Foreclosure, will receive even greater attention than they are currently.  The full impact of this factor on the market place is unknown. 

Then we have the real important factors like the state of the economy and job losses.  If businesses are not hiring because of the slow or stagnant economy, then it's very hard for the unemployed to get a job.  If you're out of work, or scared that you might be laid off of your job, you can't or won't run out and purchase a home.  Consumer confidence is not at very high levels.  Concern about our staggering national debt levels is also on everyone's mind.  Do we really need a new health care fix now?  One has to wonder about the governement's priorities.

I don't want to sound like the doomsday prognosticator, but all is not rosy.  I believe we'll make slow progress in the economy and the job growth areas.  I believe that real estate will be an important factor in the economic improvement.  I do believe that interest rates will inch up to higher levels.  The real estate market will improve one house at a time.  Know anyone out there looking to buy or sell a home?