Moody’s Economy’s price forecast for major real estate markets
17 October 2006I am trying to avoid posting “doom and gloom” real estate articles because there’s a lot of blogs doing this which will ultimately turn off a lot of investors. As far as I’m concerned, real estate is one of the best investing vehicles and you should be always involved and not be on the sidelines.
However, understanding your local markets is critical to select the right buying and selling strategy to maximize profits. I want to pass on this article from the CNN finance website
These studies never provide the details you really need to determine how confidence level of the numbers, but the results are based on experts in their field and you cannot just ignore the data. After looking at the numbers, you can see that Arizona and Nevada will be hit the hardest in terms of percentages. California will still have the largest price drops because the median home prices are so high!
In my town of Tucson, they are predicting that the low won’t be in place until Q2 2008 with a 13.4 % reduction in price. Last year, we had an approximately over 20% appreciation, so we are going to give some that back in the next year or so. This is interesting, they don’t see the correction taking place within one quarter (more like 2 years) and if you think about the duration of the up cycle, this is probably reasonable.
What does this mean? It means you have some time to get ready to pounce on the market! Use strategies to leverage yourself. Example, right now is a good time to look for new construction. Interest rates are still low , rents are increasing, and prices are dropping. Remember, the numbers need to work!
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