The National Association of REALTORS 's Chief Economist Lawrence Yun addressed hundreds of Northwest Indiana REALTORS today at the annual meeting held by our local board GNIAR at the Avalon Manor in Merrillville.
A copy of his PowerPoint presentation "Economic Outlook in Uncertain Times" is supposed to be forwarded to us soon, until then, I will recap/paraphrase his talk from my notes.
A little Indiana trivia :) Dr. Yun received his undergraduate degree from Purdue University!
PAUSE PERIOD = July, August & September 2010
After the $8,000 1st time Home Buyer Tax credit expired, the Surge of buyers looking for housing was no longer there-> AS EXPECTED.
Key indicators to measure the frustratingly slow pace of recovery of this recession will be if Real Estate Sales in October, November and December 2010 match or exceed sales during the same period in 2009.
Some factors contributing to slow economic recovery:
- Unemployment rate remains high =>7 million jobs were cut during the recession, plus many long term unemployed = those over 6 months without a job number over 6 million, not to mention college grads entering the work force!
- Government spending is up
- Budget deficit is high (just like after the great depression)
- Oil prices still high
- Business spending is down despite Corporate profits at near record highs->One Theory behind this is Policy Changes in Washington D.C ( i.e. healthcare mandates) causing uneasiness about future $ impact on businesses makes them hesitant to expand/hire.
Real Estate is Local
Despite national news, Dr. Yun shared local data which confirmed that Real Estate is a Local Business and there was no bubble in middle America (Indiana).
you can see this by the data that was shared today:
1st 6 months of 2010 - Northwest Indiana Real Estate Sales :
Lake County, Indiana Real Estate sales up 18%, Prices up 8 %
Porter County, Indiana Real Estate sales up 43%, prices down 2%
"All Bad Loans are Made in Good Times"
Dr. Yun went on to talk about the previous lose lending criteria that lead to many defaults and as a result Short Sales and Foreclosures are Here to Stay awhile - REALTORS experienced in these atypical Real Estate transactions will be in demand in this market.
Slide showed the rate of default on VA Loans (No $ down) as lowest of all. Subprime Loans = highest default rate. IMO-There goes the no "skin in the game" theory - defaults more probable from people spending more than they can afford, then from walking away from no money down loans.
The Future:
Positive Indicators for Real Estate
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Mortgage Interest Rates are the lowest since the days of President Eisenhower!
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Housing Starts are down and Population growth continues - this may lead to a shortage situation in several years.
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GDP is growing
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Economic Stimulus package is opening up job opportunities - as job growth increases, housing demand will increase.
- Real Estate is a Tangible Asset.
Thanks for stopping by and reading our Blog about Life in NW Indiana, The Housing Market, Communities, Local Sports, Events, attractions & more.
Sincerely,
Jeff & Grace Safrin, Broker / Owners
F.C.Tucker 1st Team Real Estate
13 Lincolnway Suite # 203
Valparaiso, IN 46383
Office # 219-309-9930
serving Lake, Porter, La Porte, Jasper, Newton & Starke Counties in NW Indiana
Independently Owned & Operated
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