St. Louis real estate market as seen by Lawrence Yun, Chief Economist of the National Association of Realtors
Chief economist for NAR says we will know soon if the housing stimulus worked or not.
“If the pause in housing activity only last another month . . . then I think we’re on our way to a decent recovery,” Lawrence Yun, chief economist of the National Association of Realtors told St. Louis Realtors on Monday. “But if the pause lasts beyond August, then we’re looking at trouble.”
Yun also sited jobs creation as a major indicator for an economic turnaround. “If we see 1/2 million jobs created in the second half of this year – that is a good sign that the economy is turning around,” Yun said. “Unfortunately, it may take over four years for us to recover from all the job losses we have sustained so far.”
“A possible ‘Double-Dip’ in the housing market is a concern, but it would be mild considering the huge drop in home values we have already seen,” Yun said. “The bigger fear is whether consumer psychology is damaged enough to create an ‘over-correction’ in prices.”
Yun also warned that Realtors must get used to dealing with short sales and foreclosures because they are not going away. “Distressed home sales will continue to be over 1/3rd of the St. Louis housing market,” he said.
In regards to the housing stimulus, Yun says the National Association of Realtors estimates that nearly an additional one million buyers entered the housing market to take advantage of the tax credit for homebuyers. “These are buyers we estimate would not have bought homes if the incentive wasn’t available,” he clarified.
Yun also spoke about the possibility of a ‘housing shortage’ within the next 2-3 years. “Household formation is poised to rebound,” he says. The recession has forced college graduates to move back in with their parents and for some to “double-up” with roommates. “If housing starts continue to drop as the economy improves, there will be a lot of people looking to buy houses.”
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Category : Blog &Real Estate Sales in St. Louis
