So, Kiplinger reporter Jerome Idaszak is out with a new article about the state of the real estate market.
Based on his analysis, he has concluded that the national real estate market will remain stagnant during the rest of the year, with a moderate improvement in 2008.
Forget about a housing recovery later this year. In fact, odds are that the residential property slump will extend into 2008, as beleaguered homebuilders slowly unload a mountain of unsold houses and prospective buyers continue to face affordability challenges.
Loftier mortgage rates will also accelerate the pace of foreclosures as homeowners with adjustable-rate mortgages see their payments increase. Mortgage defaults — the first stage of the foreclosure process — will hit around 1.25 million both this year and next, up from 900,000 last year and 800,000 in 2005.
Can’t argue that. The two most pressing issues for the real estate market are higher interest rates and a glut of inventory. I am skeptical that the suprime lending crisis will end up affecting the overall market. The increased cost in borrowing, along with the large number of units for sale, will have a greater effect on the health of the national real estate market.
Of course, in my opinion, Boston will remain a strong market, with nominal price degredation, if at all.
I wouldn’t be surprised, actually, if we have a small increase in average price, say 2-3%, over the coming year.
More: More Woes For Housing – By Jerome Idaszak, Kiplinger.com
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