The strongest possibility of positive change is evident in continuing historically-low interest rates, slowing inflation, a swiftly-enacted economic stimulus package, and slowly improving consumer attitudes. Each of these factors could begin to show positive impact on the market, at least in small increments.
One solid example was found as a result of the bellweather poll of consumer confidence. The inquiry was conducted by the University of Michigan. The report was recently published and it found that consumer sentiment increased by a full 2% from the month of December to January. Results of the "expectations" question on the poll: Do you expect the economy to begin to improve: Showed an increase of 3%.
It could be debated that the increase noted in January of this year was not related at all to the inauguration of a new administration. Facts are facts, and the percentage increased, not decreased. When the country's unusually-high expectations for this new administration are taken into account, it is neither surprising nor coincidental that higher levels of consumer confidence were reported.
We are just weeks away from some form of an economic stimulus package. Whatever the outcome of the plan, over time, new jobs will be seen and additional cash will be placed into millions of home owner's pockets through new tax breaks. It can be argued that no stimulus plan can have a swift enough impact to change the current course of the recession.
That point can be debatable on many different levels, and the country will not see the outcome of the relief package for a year or more.
The housing market, however, can benefit greatly and swiftly from a well-constructed tax credit which would be non-repayable by the home owner and built with a use-it-or-lose-it deadline. This type of tax credit can only help to increase home sales. The numbers could mean as many as several hundred thousand over this year alone.
For applicants with solid credit scores and sufficient down payment; historically-low mortgage rates mean once in a lifetime opportunities to save big on home loans. Current inflation rates are near zero.
Our home state of California; specifically Southern California has shown signs of increasing home sales. Prices are becoming more affordable. Home sales in the state were up 50.5% in December when compared with the previous year. On the down side of that trend, home prices fell 34.6% on the average.
There is still plenty of bad news out there regarding the economy and the real estate market. At this point in time any positive sign of recovery cannot be ignored.
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