1. Consumer confidence is on the rise. Since lack of consumer confidence was one of the most important factors that led to the recession it stands to reason that the restoration of that confidence is now leading us out.
2. There is now widespread belief that the economy is at or near the bottom. Ben Bernanke, head of the Federal Reserve predicted on 60 Minutes recently that the recession will be over and the recovery begun by the end of this year (09).
3. Prices have dropped to a level where many people can now afford to buy the home of their dreams or for their needs. The housing affordability index is the best it has been in 40 years. Translated, that means a family earning $60,000 per year can now qualify to purchase an averaged priced 4 bedroom 2 bath home in our area.
4. Sales Activity is increasing dramatically as the number of homes that went under contract in May 09 increased by 107% from the same month last year and condo sales jumped 112% signaling that many buyers who had been waiting are now jumping in. This is a further reflection of consumer confidence.
5. Inventories of homes and condos for sale are declining rapidly. For the first time since January 06, we have less than a 1 years supply of homes. As of the end of May per FT Lauderdale MLS statistics we had 10 months of available inventory. Waiting further may or may not mean lower prices, but it will almost certainly mean less to choose from and the possibility that the special home you’ve been hoping for may not be available.
6. Interest rates just recently shot up to about 5.75%. However even at that level these are bargain rates compared to what we’ve seen in prior years …. Also compared to what they may be in the future. Many in business and government leaders are concerned we could be on the verge of a major spike in interest rates which could severely limit the buying power for home buyers.
Summation: all the stars are aligned; bargain prices, low interest rates, improving economy, wide selection and motivated sellers. They project a strong message: Buy now!
