What’s behind us – and what’s ahead of us in real estate
Real estate is a “big picture” industry. Many people make the mistake of examining real estate only over a brief period of time, when the true value comes from a study over a long period of time.
First, let’s look behind us. In the early 2000’s, we saw nothing but growth—and that growth was spectacular! Never before in the history of the United States did we witness such a huge spike in home values in such a short period of time. This was true across the nation, not just here in the State of Washington.
Fast forward to 2007 and 2008. Everything changed. 2008 became one of the most challenging years ever for real estate. The entire economy suffered as we officially entered the worst recession of our lifetimes.
The decline in home values that occurred since 2007 still hasn’t brought us below the point at which the boom years began in 2000. Indications are that the worst is behind us and it’s all up from here. This means that when we zoom out and look at the “big picture”, we see that real estate has actually held its value quite well—especially considering the tumultuous times in which we live.
Now let’s look ahead. The United States government extended the First Time Home Buyer Tax Credit that was set to expire on November 30th, 2009. This innovative program has been a stimulant to the real estate market this year, bringing many people into home ownership that would not have purchased homes without it. Furthermore, the Tax Credit was expanded (at the $6,500 level) to include move-up buyers who have been in their homes five out of the last eight years who enter into a contract to purchase a home by April 30th, 2010 (for both credits, contracts need to be written by April 30th, 2010 and must close by June 30th, 2010).
Real estate is on the road to recovery In the State of Washington, the essentials are all in place:
- Population
- Immigration
- Job growth
- Single-home ownership
- Vacation home demands
- Senior housing
These key elements will assist in the continued recovery of the housing market.