Debt Free News

Real estate forecast for 2007

December 14, 2006

Just how bad will the real estate market get in the next year? According to reports today, the Dallas and Chicago real estate market will stay strong and even improve while other markets such as Las Vegas and Miami will be cooling quite a bit. It seem the trendier the area, the worse the 2007 market mat may be affected. Let’s face it, not too many people are still moving to places such as Las Vegas. Or at least not as many as last year’s boom produced in the desert city of sin anyway.

Quite simply – US citizens are increasingly cautious about the real estate market in 2007. Well, this is because they have have good reason to be nervous really – look at the coll off from last year. On the other hand, the news could be worse for sure. In fact interest rates will stay at historically low levels, home buyers will see more opportunities out there on the market. Best of all, for those planning for the long haul (not you flippers out there), 2009 could be a good set up for a bounce back.

But what about next year. The less than favorable predictions for the year 2007 have home prices continuing to fall in some markets, and the rate of price appreciation will slow in most areas of the country. Slow downs in home sales, which directly impact price trends, will set the mark for another year of price decreases in 2008. Foreclosures will continue to rise, so for those of you who are reading this debt free article and are struggling to keep the mortgage payments on time, your net worth will shrink as these homes lose some of their value. Long-term mortgage rates will also rise. Housing starts will see double digit depreciation, the sharpest decline since 1991, the worst year for housing starts on record.

But – again, the year after that – 2009 we should see a bounce back. So, it seems as though you may be on a see-saw right now (and currently your feet are in the dirt), but for those of you with locked in rates will fare well – better than those with 2 year ARMs about to expire that is. Stay the course sound familiar?

As depressing as that might sound, there are some good things going on too. Across the nation, home prices will be flat to up a bit in the next year, with several big markets seeing small increases (Chicago and Dallas especially). While new home sales will be down for the year, existing home sales will also be flat. And housing starts will not really see as sharp of a downfall as they did back in the early 1990s and even 1980s. Many new or first time home buyers may be too young to remember when times were even worse.

Stay tuned!

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