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Real Estate

2008-01-01 11:17:00

2008 real estate forecast?

I have written before about the things that will have an impact on real estate. The national economy, which we hear about every evening on the news, talks about depressed real estate markets all over the country. Prices are falling, credit is tight, and foreclosures are at all time highs. We should all count our blessings, as we are in a little slice of Heaven here, and our situation is much better than the national scene. The main force behind our stable market is our wonderful employment situation. If you are a worker looking for work, it can’t get much better. As an employer, it is tough to find and hire good workers as they are already employed. Wichita has a un-employment rate of below 3.5%, and the news from the major employers is still very encouraging, as they continue to expand and hire new workers. In all the major industries that Wichita serves, the outlook for the next 2-3 years is good. College grads that I have spoken to are encouraged by the opportunities available in Wichita and statewide. Another great part of living in Wichita is that you don’t have to be wealthy to own a home. A married couple with an average income can afford to buy a very comfortable home for their family. The Wichita area has an ample supply of very reasonably priced homes. We have had our share of foreclosures, but in general, the overall market has held its own. We have not seen the declining values that many of the larger metropolitan areas have experienced. We all wish we could be part of one of the great markets that appreciates at 20-30% in a single year. The downside to that is that it can’t go on forever, and many of those markets are now going through a contraction. We have been very busy, especially for this time of year, which bodes well for the rest of this year and next. We are still able to find great value in real estate in Wichita, for both shelter and investment. The credit market for lenders has changed considerably over the past 9 months. As a lender, we have returned to more traditional guidelines for credit and income. Because Wichita is an affordable market, not as much of the “Subprime” lending was done here, as in some of the other bigger markets. Although there are people in Wichita who are facing the challenges of refinancing to more conforming loans, the vast majority are in mortgage products that will allow them to continue to make their payments. Credit scores have become even more important, as the national mortgage providers have adjusted their guidelines, and more emphasis is being put on a borrower’s credit score. The newest programs include risk based pricing, which means your rate will be determined in large part by your credit score. Credit is still very available, mortgage rates are very attractive, and good credit has become a must. We have continued to refinance many borrowers with ARM (adjustable rate mortgage) loans, into more conservative fixed rate loans, and this will also add stability to the overall real estate market. The national markets will continue to struggle in many parts of the country in 2008. Many economists believe they will work through their problems in 2008 and stabilize later in the year. The credit markets have made aggressive adjustments to insure the availability of funds for new purchases and refinances, and this process will contine to evolve. It is very important to keep in mind that real estate is very regional, if not local in nature, so don’t be confused by the national press. We are very fortunate that our local economy is vibrant and growing, with lots of opportunity. Our employers are hiring, our city is growing and real estate is available and affordable. 2008 is looking like a great year for our little slice of Heaven, and I hope you take part in the opportunities available. More next month...