August 7th, 2007 11:51 AM by Ron Mastrodonato
Source: American Chronicle, R. Eric Bramlett (7/31/2007)
Home Builders Predict 'Long, Slow Climb'Don’t expect new home sales to pick up until 2008, predicts David Seiders, chief economist for the National Association of Home Builders. Even then, he says, “it will be a long, slow climb from the current trough.”Revising NAHB’s outlook from six months ago, Seiders expects the downturn to hit bottom by year’s end with total housing starts of 1.42 million, 9 percent below his earlier forecast. For 2008, NAHB projects only modest gains with 1.45 million housing starts. Up and Down“The dramatic downswing that started in 2005 is a correction to the equally dramatic upswing,” Seiders says, describing the current sales adjustment as “a unique event.” Prior corrections — such as those in 1991 and 2000 — were keyed to recessions and the overall economy. Recovery spurred by job and income gains was rapid compared to what we can expect from the current downturn, which might take until the next decade to fully reach trend, Seiders says.Seiders acknowledges that current figures are well below NAHB projections at the end of 2006. “The key is the unanticipated and sudden turmoil in the subprime mortgage sectors” as well as some problems in the Alt-A sector, Seiders says. Additionally, “the meltdown in the subprime sector resulted in higher lending standards which again placed more restraints on potential buyers.” Borrowers Change HabitsSeiders says adjustment to the subprime problems continues to work through the system. The number of ARMs has shrunk significantly and fixed-rate loans are once again predominate. Perhaps, he speculates, “the credit pendulum has swung back most of the way and we will be moving forward with solid fixed-rate loans as the primary foundation for housing,” he says. Other indications that there might be light at the end of the tunnel include, according to Seiders, reports from some of the largest builders of a stabilization in the number of cancellations and some recovery in the net number of sales. — By Camilla McLaughlin for REALTOR® Magazine Online
Pros and Cons of Living by WaterWhile demand never seems to disappear for waterfront property, the slowing real estate market has presented some great deals by lakes and oceans.“The desire to look out your window and see water will always be there and will always be an added incentive for someone to purchase a home," says Richard Swerdlow, Miami-based chief executive of Condo.com, an online marketplace for buying and selling condos. But there are drawbacks to living the waterfront life. Among them: premium property prices, high insurance rates (especially if you're near a flood zone), and costly maintenance because moist air corrodes pipes and eats away at paint. But there are just as many perks. Tonja Demoff, author of the book Bubble Proof: Real Estate Strategies That Work in Any Market, offers these five reasons for considering coastal property.
Source: Newsday, Laura Koss-Feder (08/03/2007)