Predicting Real Estate Trends in Boston
Karl Case is a Wellesley College economist. His name is synonymous with the housing market. He is known for his ability to predict changes, trends and problems. He was one of the first to warn us about the current real estate crisis. Now he is sought out even more. People look to him for advice, a sign that everything will be all right, or if they should run for hills because nothing is going anywhere but down.
The economy is battered and the real estate forecast in unclear. But that doesnít prevent voices from calling out. Some people claim 2009 will be much worse than 2008. Others say it is the beginning of the end, a period in which sellers, buyers and realtors can find new ways to improve their performance and reap the rewards.
This time, though, Case, like the rest of us, is uncertain about the future. He says a combination of factors make this an unprecedented situation. The market is saturated. Prices are falling, and yet people are unable to buy a new home.†
As banks tighten their belts and potential buyers are kept from the loans they need for down payments, homes remain on the market longer, declining in price and stalling the revitalization of the economy. The Boston Globe ran an interesting article about Caseís prediction for 2009ís real estate market.
The outlook for real estate is so foggy that not even a smart guy such as Case - who has studied past housing downturns so extensively he's identified three indicators that signal a rebound - wants to venture a guess.
"This is absolutely uncharted water," Case said. He said the complex nature of the current recession and global credit crunch, mixed with the particular problems brought on by huge numbers of foreclosures, make it difficult to predict where the housing market is headed, other than further downward.
That is not great news for prospective sellers and the professionals who make money helping them sell their homes. Falling prices, of course, are good for buyers, especially in an expensive market such as Massachusetts. Many who were priced out during the last boom are now finding homes much more affordable.
But just when you might start feeling optimistic, Case points out:
Unless you can't get a mortgage, because of greater lending restrictions imposed after the credit and subprime mortgage debacles.
Unless you're also trying to sell a home, especially one bought during a market peak.
Buyers can be affected in other ways, too. A weak market prompts many would-be sellers to wait on the sidelines, which reduces the number of choices available to buyers, especially of nicer homes. If you have to buy now, you may wind up settling for less than what you want.
It sounds like much is still to be determined, which, after all, we already know. It seems the best advice is to use sound judgment. Be cautious, smart and informed. Now is certainly not the time to be taking unnecessary risks, but if you have the means, a new home, or property, might be available for a price that is significantly lower than usual.
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ABOUT THE AUTHOR
Michael Russell writes about a variety of subjects, including real estate, environmentalism and architecture. This article discusses Bostonís real estate market. For more information on Boston Real Estate, visit The Real Estate Book.