The real estate market is gaining steam with consumer confidence, albeit cautious confidence, on the rise. The $8,000 first time home buyer credit and $6,500 move up credit aren’t hurting at all.
There are worries about the federal deficit and the government’s willingness and abilty to buy mortgage back securities. Look for corrections in precious metals and oil. Gold and silver are overvalued. Gas prices suggest an anticipation of a high demand over the holiday season – it ain’t happenin’. The Fed will probably keep the rates where they are because they want to keep inflation in check.
This is all good news for low interest rates in a healthy real estate market. But it won’t last. Spring brings demand - which brings higher rates and real estate prices. Couple that with buyers rushing to beat the deadline of April 30 to get their tax credits and you’ll have an over-heated market in late spring come to a halt for three weeks. The realization that summer will be coming soon will cause another little rush until mid-June. Things will then come to a stand-still until mid-August. Mark my words, you can play with cycles, but people will always need a place to live and they will pay someone to have a roof over their head.
What’s hot? Investment properties. A significant segment of the market will either remain pesimistic or not have the ability to buy because of screwed-up credit and shy away from purchasing for a few years. Buy a duplex for Christmas!