The year of 2008 has passed with several historical events like the record fall of the stock exchanges throughout the globe, the historic recession, the oil reached 0+ per barrel (mid 2008), the election of the first African-American president, etc.
The year of 2009 has started with a lot of hopes; Barack Obama has taken the oath and the massive killing in the Gaza Strip has been stopped. Now, people are expecting a lot with the new president. The injection of further 5 billion in the feeble economy is being planned. The new president will have to take some bold decisions to put the economy back on the track and to overcome the historic recession.
The real estate industry was badly hurt in 2008, the worst in the last few decades. We have seen a record decline in the home prices throughout the United States. Lending agencies have reduced the mortgage rates to keep the momentum of real estate sales.
All the reports which were prepared by different real estate survey organizations speak the same language, the home prices will be further decreased in 2009 - the only difference among these reports is in the percentages of the decline.
Home Sales Decline
According to the National Association of Realtors (NAR), around 4.98 million existing homes sold in 2008, and the figure will be further declined in 2009. It is important to remember that 2008 was the third straight year for low number of existing homes' sales. The injured credit market will continue its negative trend and would not allow people to get mortgages freely. This situation will also increase the number of renters - renters would be able to save money of a mortgage, maintenance, etc.
Increase in Online Search
NAR further reported that in 2008, 32% buyers first get the information about the home from the internet. People will prefer to search for homes on the internet rather than relying only on the real estate agents. This trend will also reduce the number of real estate agents and brokers - more job cuts.
Increase in Commission Rates
The real estate agents will increase their commission rates up to 6% to overcome their expenses, especially, in a buyer's market. People will prefer to use the internet for transactions to save the heavy commission amounts.
Increase in Single-Family Home Sales
People will prefer to live in small houses (in terms of covered area) to save money which they were used to spend for extra square footage. They would prefer single-family homes and would not take a buying decision based on week-old news. Now, real estate prices are not stable as they were used to be - they are fluctuating on a daily basis.
In a nutshell, the year 2009 would not be very much different from 2008. The home prices will continue to decline; the recession period will continue; to induce people, the mortgage rates are expected to decline further; people will prefer to use the internet for home buying; and the number real estate agents and brokers will continue to reduce.
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Syed Rehan is associated with AgentCampus.com that offers Real Estate License & Real Estate CE.
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