Don’t limit your role to just helping people buy their primary residence. Introduce them to real estate as an investment and become a trusted adviser to them on what has traditionally been a neglected part of many investment portfolios.
The winning combination of low interest rates, strong home price appreciation, and moderate job growth that drove record-setting home sales last year will continue to fuel the home-sales market this year. Meanwhile, practitioners will be gearing up for a solid revival in the commercial arena.
Home price appreciation figures mask a country growing increasingly divided between households enjoying strong appreciation gains and those largely without. That division tells us how communities are faring in the competition for jobs and, by extension, how robust their home sales markets will be in the years ahead.
Mortgage rates remain low by historical standards, but they’re rising. From a low of 5.45 percent in March, rates spurted up almost one percentage point in April to 6.3 percent. And trend lines point to continued upward movement through much of this year.
Federal Reserve Chairman Alan Greenspan trained his spotlight on the two secondary mortgage market giants, Fannie Mae and Freddie Mac. It’s not clear how much of a favor he was doing lawmakers—or the country.
For real estate, that most local of industries, the impact of offshoring is being felt largely in mortgage lending. But the next target may be the increasingly automated transaction management process that’s largely the domain of real estate brokers, independent contractors, and title companies.
What happens when the effects of the tax cuts and federal spending—which have swollen the budget deficit—and the Fed’s policy wear off? What price will the economy pay for the federal government’s profligacy?
The economy is growing, mortgage rates remain low, and demographic trends continue to be favorable as baby boomers and immigrants purchase homes in strong numbers. So look for housing to remain solid for 2004. But let’s be prudent planners and keep our eyes on four economic trends.
With 2003 shaping up to be yet another stellar year for residential sales, it’s fair to ask if business can get any better in 2004, especially with the prospect of interest rates inching up as the U.S. economy gains momentum.
The way some analysts keep looking for signs of a housing bubble, they must believe the laws of supply and demand have been revoked. But, a healthy housing market and rising home prices aren’t incompatible.
On any number of accounts, the U.S. economy remains sluggish. Unemployment is up, consumer confidence is down, and the rate of economic growth remains tepid. In the first quarter of this year, growth was about 2 percent. But housing remains well-positioned, thanks in part to low interest rates and continuing sound asset appreciation.
With our country at war, now’s a good time to take stock of where we are—both as a country whose economy continues to struggle and as a people who must make investment decisions while world events rage outside our immediate control.
As you’d expect during this time of growing global concerns, many people are wondering if a prolonged military confrontation in the Middle East will finally stall the two-year record-breaking pace of the housing sector.