Bankers Exchange Services

According to an article written by Cyril Moulle-Berteaux in The Wall Street Journal “The Housing Crisis is Over”. I for one was very happy to hear this news as I was starting to get discouraged by all the doom and gloom I hear every night on the news. According to this article we have reached the bottom of the housing market and the trend will now start to go up from here. As stated most people don’t realize we have been in a down market now for three years, the peak took place in July of 2005.

A lot of the data used to compile the information which is being fed to us through various media sources are based on income and interest rates being compared from the 1970’s and 80’s when put into today’s prospective are vastly askew. Back in 1981 mortgage interest rates were 18.5%. Currently a 30-year fixed-rate mortgage can be obtained for less than 6%.

Much of the analysis used to bring us this glimmer of hope has to do with new home starts. The inventory of new home completions is now just under new home sales. The decline in construction will likely continue through 2008. It is estimated that sometime in 2009 the inventory will reach a level significantly below new sales which will then have a direct effect on tightening home prices.
To say we are experiencing a crisis in our housing market with serious economic consequences that are still unfolding is a spot on analysis. The good news as Cyril so eloquently puts it “housing led us into this credit crisis and recession and is likely to lead us out. The process is underway, right now.”

For more information please contact our office at 877-989-1031

This past Thursday, I was waiting for an appointment and saw a headline on the front page of a newspaper stating that California existing home sales in April were up over 30% from March.  Although the sales were still lower than their level one year ago, it was the first postive sign we’ve seen in the housing market in quite some time.

Everyone has a different opinion about where the “bottom” might be in the real estate market.  Personally, I believe the market will be soft for quite a while and the bottom might come in late 2009 or early 2010.  But in the end, nobody can tell the future.  One thing is for certain: there is a growing amount of pent up demand sitting on the sidelines and as soon as they see a reason to get back into the market, there will be a surge of activity.  April is a case in point.

Comparing house prices today with those of 2005, there is no question values are more attractive.  In some areas, it’s actually possible to buy an investment property and be cash-positive right from day one.  That hasn’t been possible in California for a while.  So whether we have hit the bottom or not, this is still a great time to look at real estate.  There are a lot of deals out there!

Bankers Exchange Services specializes in 1031 Exchanges and if you have any questions about your own particular circumstances, click on the Contact tab and send us an email.  We’d love to hear from you and would be happy to answer any of your questions.

For more information please contact us at (877) 989-1031