Your Questions Answered, Sort of!

November 14, 2008

Recently I was contacted by a gentleman in Chico who has about a year before he’s ready to move to the Sacramento area but asked a very good question about the Sacramento real estate market.

Because he won’t be ready for a year and wants to make the most of the current market opportunity, he asked,

“Do you think there’s serious threat of a significant rebound in the housing market over the next year?”

This is a good question and a tough answer.  No one really knows what the future holds.  Based on how things are looking, rising unemployment, the credit markets being pretty tight at the moment and the economy for all intents and purposes in a recession, it’s very hard to predict what will happen over the next year.

In the beginning of 2007, the “experts” said that the market was going to rebound and begin to bounce along the bottom.  The “experts” all agreed that this would occur.  That didn’t happen nor did we come close to that happening.  In the beginning of 2008, I was working for a new home builder and they were saying that we were at the bottom.  That didn’t happen either.

The correct answer is, and no one likes to admit it but it’s true, I don’t know.  I have only a vague idea of what’s possible as anyone with any sense will tell you.

Change Is In The Air

I’ll say this, I’m glad the election is behind us.

My opinion is this.  How things will shape up over the next year will depend largely on consumer confidence and the resulting spending that people will do.  If consumer confidence reverses course and begins to recover, things overall will begin to improve.  Significantly rebound?  I don’t see that happening.  Bouncing along the bottom is more likely.

Treasury Secratary Paulson has said that there aren’t any major failures on the horizon.  He can’t guarantee that as no one can.

A rebound at all will depend on the inventory levels (homes on the market), credit markets loosening more than they have in the last couple weeks, consumer confidence going up and a decline in the unemployment percentages.  These aren’t things that have historically happened overnight.

What I will say is this:  Good luck, President Obama.  You’ve got one hell of a job waiting for you on January 20th, 2009!  Make us all proud.

Looking for cash flowing rental property in Sacramento?  Give me a call, I find them all the time.

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