National Association of Realtors Chief Economist Lawrence Yun Addresses Local and National Housing Concerns

February 4th, Dr. Yun shed light on the current market trends and forecasts in the housing economy before a captivated audience of Realtors from all over the Greater Boston area.  In spite of the fact that interest rates are the lowest they have been in 45 years, and that there is sizable pent-up demand, buyers are afraid to enter the market due to the media’s predilection for a negative real estate slant.   Yun made the point that the doomsayers equate rising house values and lowering of wages, but fail to consider low interest rates, thus overlooking the important mortgage obligation to income factor. 

The remainder of his address was spent extrapolating data from the National Association of Realtors and the Federal Reserve, and putting it in perspective,  illustrating his highly regarded opinion that “all real estate is local” - that talking about national real estate averages is about as effective as having a national weather forecast.  There are huge local variations and national data is not necessarily meaningful.  

Yun said Boston is a bellweather market and we have already experienced a correction: the number of Massachusetts existing homes on the market is down due to absorption and there has been a reduction in the number of housing starts. Dr. Yun stated that inventory control is a positive aspect of the lower numbers.  

He summerized his outlook by stating he thinks we will avoid recession because:

•  the Federal Reserve rate cuts
• the upcoming elections breed planned economic stimulus talk
• the raising of loan limits (Jumbos loans going from $417,000 to $635,00 or more).

In closing, Dr. Yun said that real estate remains the best shelter and that historically, after 6 years of ownership most buyers have a positive equity position. 

If you have questions regarding this article, please contact me.

 Ann Burford, ABR, Pinnacle Realtor

Cell: 781.910.1419

Office: 781.237.5000

aburford@PinnacleHouses.com

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