gail wrote this at 4:02 pm on September 19, 2007:

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In our weekly office meeting today, our manager discussed a seminar that he had just heard at a Coldwell Banker Previews meeting in Monterey. The speaker was Gary Watts, a real estate economist based in Southern California, and his talk was entitled “The Real State of Real Estate 2007″. Although his speech touched upon many points, the main point that struck me (when reading a printout of his seminar) was his positive take on the news and outlook on the real estate market in a world that is so consumed by the horrendously negative news media. As we all know, the real estate market has had an adjustment this year (creating a hot buyer’s market by the way), but the market is no where near the sky-is-falling situation that the media wants you to believe, and from Mr. Watts we finally have a report which takes the same information that the media has had for the last year, and introduces it in a positive way. What a breath of fresh air!

The following are some interesting points that Gary Watts made in his speech by remembering the real estate market for the last 30 years:

Quote from Business Week in 1969:

The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.

Quote from National Business Magazine in 1997:

“The median price of a home today is approaching $50,000…housing experts predict price rises in the future won’t be that great.”

Quote from Money Magazine in 1985:

“The golden-age of rish free run-ups in home prices is gone.”

Quote from the San Francisco Examiner in 1996:

“A home is where the bad investment is.”

Mr. Watts uses these examples to show that the media has always focused on the bad economic news, and he feels this is happening now more than ever. As he also states, our current economy is “extremely strong, profits are superb and the world economy is exploding.”

I have noticed that one big question buyers have right now is: “Is now the right time to buy?” They think nothing will be lost by waiting to see what the market does (especially with the current state of the mortgage industry). Here are a few interesting points that our Reginal Vice President highlighted today:

• Timing the market: The real estate market is cyclical. If you look to history, a downturn in the market on average lasts 27 months. His estimation of this downturn is that we are in month 24 of this 27 month cycle. There are some EXCELLENT opportunities for buyers right now.
• Foreclosures: He also addressed the fact that some buyers are waiting for foreclosures to flood the market. According to Gary Watts, the statistics regarding foreclosures are as follows: As of last month, there was 1 filing for foreclosure per every 653 houses in America. Presently, one out of every 10 buyers in the country is ending up in foreclosure. California now ranks #4 in the nation in foreclosures (down from #1!).
• Babyboomers: Over the next decade, there will be a %25 increase in the population over 50 years of age. Our Desert region is a high demand destination for this demographic which will keep the demand high for housing.

These are just a few points that I thought were interesting… It’s nice to finally hear some positive news on the market. Email me and I’ll send you a copy of this 7 page speech outline.

Filed under: Real Estate

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