Friday, July 23, 2010

View My Crystal Ball


Here is my prediction for the real estate market, politics and the economy as a whole for the next year or so.

There will be another real estate tax credit implemented within the next 6 months. I am not sure of the depth or breadth of the credit, but the housing numbers on a national level have been atrocious, and one would be hard-pressed not to draw a correlation between housing numbers and the expiration of the credit. (Yes, the credit was extended for parties already under contract, but that is irrelevant to new contracts, building permits, etc.) Moreover, I have been hearing increased debate on the merits of a new credit over the last few weeks. As the government recoups a portion of the funds expended on stimulus (selling of Citigroup stock at a profit being one example) it will mysteriously come up with the money for a new stimulus which will likely be implemented before the upcoming elections. (The Democrat Congress will want it passed before the elections in order to avoid Republican opposition.) This will spur activity in low-priced and mid-priced home markets.

Speaking of the elections, Republicans will gain many seats in November and there will be a balance of power - which is normally good for the stock market. As such, we will see a bull market, at least for a few months, which should improve public sentiment. This will benefit all price ranges and should stimulate home sales.

The Bush tax cuts will be extended. The extent to which they are extended will dictate the impact on housing, but this will no doubt benefit higher-end home sales.

All of the above is trivial without a decrease in unemployment. The only way for unemployment to subside is for the costs associated with hiring to become more defined. In essence, business owners need to know what costs are associated with health care and new regulations imposed by the government before they will be willing to hire employees. These costs should gradually become more transparent over the next year and I think at that point, unemployment will begin to subside. Unfortunately, getting back to a healthy unemployment rate will take years, not months.

This is just one man's opinion...

Monday, July 12, 2010

Generation Y Housing Trends

My wife forwarded me an article she thought would make an interesting basis for a blog entry. The article, written by Mary Umberger and appearing on Boston.com on July 6, identified housing trends for Generation Y members, which it defined as persons born from approximately 1977 through 1989.

Here are the highlights:

This generation will tend to purchase their first homes later than prior generations. They tend to travel and/or go to graduate school. In addition, they are dealing with the adverse economic issues of the last few years. While I agree with the general premise, the article's estimate of age 35 for most first-time Generation Y buyers seems high. I believe the age will be closer to 30.

As far as their desires, Generation Y buyers seem to prefer locations closer to cities and public transportation than did their predecessors. They are willing to work with smaller homes, but require open concepts. A little land and a garage are important, whereas a formal dining area is not. I disagree with the article's premise that media and game rooms are not important to these buyers. Most of my clients in this age range are very focussed on an adult playroom, as well as where they are going to hang a large-screen television.

With the above said, sadly for me, I am not a member of Generation Y, so I would be interested in hearing the thoughts of those of you who are. Regardless of your age, feel free to let me know what is important to you in a home in order to keep me apprised of market trends.

As always, contact me via cell (978-423-9309) or email (john@jw-realestate.com) with any comments or questions. Clients, be sure to contact me soon to reserve your tickets to our annual company outing - the Saturday, July 31 (5pm) Lowell Spinners game!