10 Reasons The Housing Market Will Begin to Recover In The 2nd Quarter 2008

I thought that you would find this bit of news extremely interesting. This is the perspective of a lender who has been in the business for over 30 years. He is evaluating this market compared to the market of 1980-1981 and 1990 to 1994 when we also had major real estate slumps.

1. The Federal Open Market Committee (FOMC) Will Continue to Lower Interest Rates - This will continue to stimulate the economy, keeping unemployment low in addition to helping ARMs reset at lower interest rates.

2. The Economy is Creating Jobs and Unemployment is Low - During the last two housing downturns reasons were directly related to recessions in the U.S. economy.

3. Lenders are Helping Homeowners with Loan Modifications on ARM Resets - This will decrease the number of home buyers needing to sell or going into foreclosure.

4. Subprime ARM Resets Peak in 1st Quarter 2008 with Minimum Resets By Year-End - The credit markets froze in fear of these resets. Once past, more credit markets will make money available.

5. Home Builders are Dumping Standing Inventory to Remove Inventory Off The Books By Year-End - The competition to the resale market will be greatly reduced.

6. Sellers of Existing Homes Will Take Their Homes Off the Market At Year-End That Don't Need to be Sold - Combining this with those that need to sell and lowering their sales prices during the holiday slow period, will cause the months to sell inventory to come down. During the downturn in the 90's there was a 27-month inventory whereas in today's market we only have a 10-month inventory.

7. Credit Markets for Jumbo Financing are Opening Up - The spread of interest rates between conforming and jumbo loans has been greatly reduced. Many programs are now available making it easier for buyers to qualify.

8. The Fires in Southern California Will Create Construction Jobs and Help Supporting Industries - California has been losing jobs in this area. This in and of itself will keep a cap on the unemployment rate. Furniture, appliances, landscaping, architects, etc. will benefit.

9. Real Estate Investors are Stepping Up and Making Offers - Mostly absent in 2007, real estate investors are stepping up to take advantage of the foreclosures and lowered prices.

10. Buyer Sentiment of Those Waiting Will Change as Foreclosure Reporting Lessens - There are so many buyers just waiting for a sign as they fear prices will continue down. The sign will be decreasing foreclosures and inventory time to sell will be reduced and reported by the media.