The real estate blog.

I was waiting until 4th quarter numbers came out before I attempted to give some predictions on the future of real estate locally and nationally. Then last week happened.

With this amount of volatility in the world, there’s no way anybody can accurately predict what’s going to happen in real estate in 2008. Rogue traders upsetting world markets and dictating Fed policy? Give me a break!

I’m going to pass on the predictions this year. Nobody even knows what the Fed will do to rates tomorrow. A .25, .5, .75 cut wouldn’t surprise me. No action wouldn’t surprise me either. An increase? That would be shocking.

There is one thing we can be sure of this year and that is short term interest rates are trending down. This will help some people with resetting adjustable

rate loans as some will be able to refinance. Should Congress get around to passing the stimulus package close to what has been proposed, that will help as well.

I believe these two actions will help the housing market, at least a little bit with sentiment. Some home owners are so down on housing they’re burning their houses down or intentionally withholding their mortgage payments. I think that sentiment will shift. It’s important that it does. Diana Olick wrote -

I continue to believe this is not entirely about mortgage rates and availability, or even affordability–it’s all about consumer confidence. Until the numbers stop falling, nobody’s going to want to get back in the game, but the numbers won’t stop falling until people DO get back in the game.

While rates have been near historic lows for most of this decade, we’re getting to the tipping point again. Mortgage activity increased last week and the questions and sentiment I saw around the blogosphere suggested buyers and owners were questioning if now was the time to make a move. Continued declines in short term interest rates, a wide selection of inventory and a little faith will go a long way in improving the housing market.

I think Utah’s real estate market is going to feel some of the pain the rest of the nation has been feeling for a year and a half now. How bad it will get and for how long, I don’t know and I’m not willing to guess. We’ll have to wait and see.