Housing sellers expect stronger market in '08

Realtors believe both number, prices of existing-home sales are on the rise

Job growth and better mortgage conditions are among the reasons a national real estate trade group has improved its outlook for the housing market.

The National Association of Realtors on Monday projected existing-home sales to rise to 5.7 million in 2008, up from the 5.67 million expected this year.

And while existing-home prices are expected to be down 1.9 percent to a median of $217,6000 for 2007, the group expects the price to rise 0.3 percent to $218,300 in 2008.

Lawrence Yun, the association's chief economist, said that "the unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was under performing.

"Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels."

Yun said home price growth in the "vast affordable midsection of America will help the national median existing-home price growth slightly in 2008.

"I then expect price appreciation to return to more normal patterns in 2009, perhaps rising one of two percentage points above the rate of inflation."

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Price: Does it matter?

It seems that housing prices have become quite an obstacle for the real estate market. Personally, I think most people need to take a fresh look at prices. I know, I know... the price of your home is a very emotional thing, and the "media" has everyone frightened of a coming crises of Biblical proportions, but price is what it is. It's just price.

First, let's talk about current homeowners. The real estate market is not unlike any other market, prices go up and prices go down. Look at the stock market. We all know that if you make your investment decisions on every upswing or downswing, not only would we all go bonkers riding that roller coaster, but we'd end up losing money too. Right? Isn't that why a diversified portfolio and a long-term strategy is the most certain way to make money in the stock market? I should know, I was an investment advisor for better than a decade. (Man I'm gettin' old).

Employing a long-term strategy in the stock market doesn't mean you don't make decisions from time to time. Sometimes you have to move your assets due to a number of variable reasons. It's the same with owning a home. The house you're living in today may be your long-term strategy, but for variable reasons, you need to make changes. Maybe you thought you were done having kids, but now your wife is pregnant with twins. This happens! As crazy as it sounds, this exact scenario happened to two of my close friends (apparently the odds are better than you think). You may change jobs, or want a different school district. You see, sometimes you have to move your family (assets) for variable reasons. And those reasons are more important than current market conditions to your long-term strategy, which is really, your life.

Now back in my investment days, I'd often be down 20-30% on a position, and I'd sell it to buy something else. Emotionally, what would go through my head is "oh no, I just lost 30%". Being a professional, I quickly reminded myself that I didn't just lose 30%, I just moved my assets from one stock that was down 30%, to another that was down 30% or possibly more. In other words, I may have been selling at a discount, but I was buying at a discount too! Not only that, the stock I was buying at a discount had a better potential for gain than the previous one did. It may have "felt bad", but it was good medicine.

Maybe you need a bigger home, but you're worried you will "lose" money on your current home. First, think about it from the perspective of what you actually paid for your home, not from what you perceive it's high point was. The high point never matters, because in reality, it's only myth. Most people I work with are usually up quite a large percent from purchase price versus today's (discounted) price. They may be down from the high, but that doesn't matter. The only thing that matters is what you originally paid. Second, think about that new home you'd like to buy. If you would have bought it last year, or the year before, how much more would you have had to pay? Probably a lot more! So you may be selling your current home at a discount, but you're picking up your new home at a discount too. And the new home might have a better potential for gain than the old one too.

The real estate market will turn. Markets run in waves. What is is. So if you're selling low, you're also buying low, and if you're selling high... guess what? You're buying high too! And let me tell you from my investment advisor experience, the more the "media" convinces you things are going to keep getting worse, once they have you convinced it's Real Estate Armageddon, the downswing will be over. The "media" are always the last in line. No offense to the many teriffic people in the news business, but they just report news, they don't actively work in the financial, real estate, etc. markets. Their primary goal is to keep you tuned in so they can sell as many commercials as they can for the max price they can get, not to help you predict and/or navigate markets.

In summary, live your life! If you need or want to move, then do it! Don't let "market conditions" get in your way. Trust me, worrying about things like that will hurt you in the long run more than it will ever help. This is your life! The market is just an abstract, it doesn't have a real life like you do, so don't let an abstract dictate your decisions!

Unfortunately for some people, I do understand that you really can't sell because you just bought your home in the last couple of years, and you are down too much. Or maybe you took too much equity out while the price was sky-high. That sucks. It does, and there is no better way to say it, than to say that it sucks. I feel for you. I really do. I'm human, and I've made even bigger mistakes than that. Oh, well. Keep your chin up, and have a little faith, because markets always turn, and it won't be too long before you have a whole bunch of equity in that house to roll into your new one.


A quick note for first-time home buyers:

What are you waiting for? Are you hoping Santa Claus will drop one down your chimney? Oh, that's right, you have to have a chimney first (they come with many homes). The Easter Bunny?

Let's get real here. Talk about no time like the present! Get out of that apartment, or out of your mom's garage, and buy yourself a home! Now is the time. This is the place. You are the one.

Any one of the amazing real estate professionals here in the Active Rain Network would be more than happy to help you. Working with first time home buyer is a blast! And click the link on my profile, or give me a call. I work for an old-fashioned bank and we have plenty of money to lend. I'm pretty creative when it comes to purchasing a home, and if you need 100% financing, that's no problem for us either, we're happy to help. I lend in all 50 states. End of commercial. :-)

AC in the winter? Brrrr-rilliant!

It's one of the best investments you can make in your home. And the best time to put it in is the dead of winter. From Money Magazine's Josh Garskof

(Money Magazine) -- Nobody thinks much about air conditioning this time of year. Heck, depending on where you live, your heat may already be on for the season and your flannel pajamas pulled out of storage.

But if your house doesn't have central air, or if the system you have is about 15 years old (and therefore probably nearing the end of its life span), you should get the job done this winter. Not only will it automatically raise the value of your property, but you'll snag an iceberg-size seasonal discount.

Winter is a slow time for contractors. "In December we're trying to find enough work to keep our crews busy, so our pencils are a lot sharper," says Robert Wilkos, general manager of Peaden Air Conditioning in Panama City, Fla.

How sharp? Like many contractors around the country, Wilkos typically knocks 10 percent and sometimes as much as 20 percent off his wintertime bids. That's a savings of up to $3,000 on the $6,000 to $15,000 central AC costs.

Even at full price, adding a well-designed central air system is a no-brainer. Not only does a system cool and dehumidify the air far more effectively than window units, but it filters out allergens and dust and lets you use your whole house, instead of confining you to a couple of rooms.

What's more, central AC instantly increases the value of your house by at least as much as it costs to install, and in warm climates by up to 10 percent more, according to appraiser Alan Hummel, a spokesman for the Appraisal Institute, a national standards-setting organization.

"It's not just in the South, where air conditioning is expected," he says, but anywhere summers get hot.

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