Real Estate New York

Market Update June 2008

Economists Predict Credit Crisis Near End

Forecasters expect credit conditions to improve in the second half of the year; outlook for economic growth scaled back.

WASHINGTON (AP) The worst of the painful housing slump and the credit crunch might come to an end this year.

That's the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym NABE.

Forecasters are hopeful that the housing slump - in terms of home sales - will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarters of this year. House prices, though, are still expected to drop this year and next.

On the credit front, economists predict conditions will improve in the second half of this year.

To bolster the economy, the Federal Reserve has been cutting a key interest rate since last September. However, when the Fed last lowered rates, in April to 2%, policymakers signaled that their rate-cutting campaign may be drawing to a close. Fed policymakers are concerned that moving rates lower could aggravate inflation. At the same time, they are hopeful that their powerful rate cuts plus the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses will lift the country out of its slump.

Read more: from CNNMoney.com

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Conservatories: Bringing the Outdoors In

More than a space to raise plants, these glass-enclosed rooms are also a popular place for home owners to entertain and relax.

Regardless of the season, home owners who are lucky enough to have a conservatory often consider this room the most beautiful spot in the house.

It's a sunny space to read a book and catch a spring breeze, a fun place for children to watch the snow fall, or a retreat where adults can unwind and listen to the rain fall on the gloomiest days of the year.

“There's a natural tendency to gravitate to the room in the winter or the summer,” James Licata, owner of Town & Country Conservatories in Chicago. “You feel like you're outdoors even though you're not.”

Licata's own conservatory, attached to his post-Victorian home, serves as a spillover area from the nearby kitchen.

Like Licata, many home owners today use their conservatories as a living space, breakfast room, or family room. Some even use them to enclose a swimming pool if the space is large enough. However, there was a time when these spaces really were meant for plants.

Read more: from Realtor Magazine by Mary Beth Klatt

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Architectural Coach: Split Level

A Modern style that architects created to sequester certain living activities--such as sleeping or socializing--split levels offered an multilevel alternative to the ubiquitous style in the 1950s. The nether parts of a typical design were devoted to a garage and TV room; the midlevel, which usually jutted out from the two-story section, offered "quieter" quarters, such as the living and dining rooms; and the area above the garage was designed for bedrooms.

Found mostly in the East and Midwest, split-levels, like their Ranch counterparts, were constructed with various building materials.

Read more from: The National Association of Realtors

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Lack of Consumer Confidence
Presents Buying Opportunity

"With fewer buyers in the market sellers are negotiating in ways we haven't seen in the new millennium."

Every market Indicator but one predicts a return to a seller's market in the near future. The single remaining negative factor is the actual number of sales: down 20% from the same period last year. Consider a strengthening economy with 22% more annual household income, 23% more in stock market wealth*, 25 million more people, and 11 million more jobs since the beginning of the last sellers' market and the picture becomes even more interesting.

Given affordable mortgages and large inventories of well-priced properties the laws of supply and demand should produce an increase in the number of sale, not a decrease.

The culprit is a lack of consumer confidence. After all, the news media reports daily on the demise of the housing market. If these prophets of doom are right prices are sure to fall even more. And no one wants to buy a home that may be worth less next year than they paid for it.

This can become a self fulfilling prophecy if the actual facts of the present Capital Region market are ignored.

Last month we reported that the bottom of our current down cycle may well have been reached. Judging by this month's stats, it has, though we would expect a wavering of the upward trend as the new seller's market takes hold.

And while this may come as bad news for those who have yet to make their move, it needs to be stressed that our statistics come out the very first day of each month. Other sources take weeks, even months, to tabulate the numbers. The reason for this is that they want to make sure to count each and every sale while our numbers are consistently shy by 1% to 2% of the actual sales numbers. Our trends, on the other hand, have never missed the mark. This is essential because it gives you, the buyer, a significant edge over the competition who even now believe our market in the Capital Region is in a nose dive.

With fewer buyers in the market sellers are negotiating in ways we haven't seen in the new millennium. Fewer buyers mean less competition. This fact alone can make the difference between a great home and the best place available for the money in a tough sellers' market the likes of which we've seen until November of 2007 and will likely return in the months to come. Now is the time to capitalize on what's left of our short-lived buyers' market.

*Based on growth of the Dow Jones Industrial Index

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