What is the real estate market and the U.S. economy going to do in 2012?  Here is my read on the real estate market and the the economy for 2012.  In terms of credibility in writing an article on the economics of both the real estate market and the U.S. Economy, just for your information, I have a degree in economics (with an emphasis on monetary policy), a degree in teaching, a doctorate in law, and 37 years as a business owner, lawyer, registered financial adviser, certified estate planner, business consultant, and real estate broker.  While that certainly doesn’t guarantee anything about the accuracy of my perspective, the so-called experts and talking heads on T.V. have been wrong far more than they’ve been right since 2005.  The odds are my prediction will be more accurate than the talking heads who never warned us of the impending doom until after the fact.

The Real Estate Market

There are economic cycles and patterns that tend to repeat themselves over time, but these past five years have seen variables thrown into the mix that no economic model has ever had to include in the predictive programming.  No Ph.D.  has ever lived through such times with so many variables and so many potentially complex outcomes.  The John Keynes economists have blown a fuse trying to figure out how to run fiscal spending and taxation models and not run the country over the cliff.  The Milton Friedman economists believe monetary policy is running amok and has been hijacked by social terrorists.

The truth is the politicians have no clue how to solve the problems they got us into.  While we are on the brink of defaulting on our debt, and Europe has sprung such large leaks they can’t seem to bail water fast enough, the truth is no one knows what will happen in 2012.  No one knows precisely because there are literally thousands of economic variables at play.  Governments all around the world now control many of these variables, and business owners who are the engine of employment, are at the mercy of politicians and government agencies calling all the shots.  Free enterprise is no longer functioning as the economic engine of the greatest laissez faire system the world has ever seen.  (more…)

Possibly Related Posts:

• Retired and Planning to Start a Business in Sequim
• Logging on the Olympic Peninsula
• Wisdom from an 84-Year Old Homeowner
• Life Happens – A Tribute to Dakota Leach and Family
• Sequim WA News

This real estate market has two dramatically different outcomes for people today.  The two outcomes depend on which group you’re in.  The first group includes homeowners who are getting hurt in this real estate market.  The second group consists of homeowners and buyers who have a rare opportunity.

Real Estate Market – The Hurting

The largest percentage of homeowners in history will be those getting hurt in this real estate market.  There are several reasons.  Many overextended themselves on their mortgages, no thanks to the government programs and the greed in the mortgage industry that pushed mortgages on average Americans without income qualifications and with reckless disregard for ability to make the mortgage payments.  While each of us bears responsibility for our own decisions, this mortgage debacle has resulted in more foreclosures and middle class Americans loosing their homes than any other time in our history.

Compounding this crisis is the economic recession with the total unemployment and underemployment rate at 16.6%.  [See Real Unemployment Rate]  Don’t believe the economists who says we are not in a recession.  We are, and it’s been devastating for middle class Americans who are homeowners in this real estate recession.  The loss of jobs by one or both spouses, or the reduced hours and compensation means they can’t make their mortgage payments, and because this real estate recession has put so many homes underwater (they owe more than the home is worth), they cannot sell their homes either.  Middle class Americans are losing the equity in their homes in this real estate market, and their credit will be destroyed for the next decade.  Their savings have dwindled to nothing while they try to make ends meet, and their credit cards are maxed out, resulting in further damage to their credit.  Millions of these good Americans have collection agencies hounding them daily, and many have judgments already entered against them, also accruing interest at 12% (the legal rate), and these judgments will follow them for seven years, unless they are re-registered, in which case the nightmare continues.

These are difficult times, and sad times for so many families.

Real Estate Market Opportunity

The winners in this real estate market will be those who do have good incomes, good credit scores, and cash to pay 20% or more down on a home.  Fortunately, there are many retirees who fall into this group.  There is also a very small percentage of young families who have high paying jobs and also fall into this group of winners.  Why are they winners?  Because they will be the small percentage of buyers in this real estate market who can afford to buy homes at the best prices in years and at the lowest historical interest rates.  If you are a buyer when everyone else is a seller, you end up the winner.  This is an economic reality.

Real Estate Market Choices

There’s nothing you or I can do individually to change all of this on a macro-econcomic level.  On a micro-economic level, however, each of us must take responsibility for our own financial futures.  You and I cannot save the millions of families losing their homes or struggling without a job, but we can do something about own own futures.  It makes sense to manage your financial future with conservative planning and with wisdom.  Right now the application is to take advantage of this real estate market to take care of your own future.  After all, before you can help anyone else, you have to be able to help yourself.  This is a time to buy carefully at the right price.  This is definitely a buyer’s market in this real estate market and in this recession.  As I’ve written elsewhere, distinguish the market from the house.  The real estate market is down but don’t buy the market.  Buy one house in the right area at the right price, and that’s how you win in this real estate market.

Possibly Related Posts:

• No One Can Call a Market Bottom
• Sequim Washington Magazine – Something New and Exciting
• The Housing Market is Strong and Weak
• Sequim Real Estate Market
• Sequim Real Estate Prices – Selling Price as Percentage of Listing Price

Here is a real estate market report from the Northwest MLS.  December’s volume of pending sales around Western Washington nearly matched the total for the same month a year ago, which was the best December since 2006.  Sellers accepted offers from 4,359 buyers last month, only 40 fewer than a year ago when members of Northwest Multiple Listing Service reported 4,399 pending sales of single family homes and condominiums. In 2008, members notched 3,255 pending sales, down from 2007′s total of 3,950 pendings and the 2006 figure of 5,744 mutually accepted offers.  Eight counties had year-over-year increases in pending sales for December, with two others equaling the year-ago totals.  These are interesting real estate market stats in this current recession. (more…)

Possibly Related Posts:

• Do People Buy Homes in Sequim in the Winter Months?
• Home Sales Oversated by NAR
• Home Sales and Building Pick Up
• Sequim Horse Ranch Sold
• Sequm Homes for Sale – How Many Days Listed in the MLS?

What is the real estate market doing?  Are homes selling in Sequim and Port Angeles?  Yes, but it is a slow market.  Buyers are discerning and cautious, and only homes that are reasonably priced are selling in this market.

The Real Estate Market

There are homes where sellers (or their agents in whom sellers place their trust) are grossly overpriced to the tune of tens of thousands of dollars.  This real estate market is full of inconsistencies from home to home.  But the reasonably priced homes that are within the parameters of what retirees are looking for, are selling, albeit very slowly.

Real Estate Market on Bell Hill

I’ve sold two homes recently (8 this calendar year) which show up on my Market Report as red diamonds representing sold homes, and on Bell Hill I’ve sold one home recently, which turns out to be 50% of all Bell Hill homes sold this calendar year.   It’s a bit surprising that Bell Hill homes have not been selling this year, and there are many for sale, but that says more about the real estate market than it does Bell Hill.

Real Estate Market Data

Of course, the real estate market statistics around the country can be confusing.  And from week to week, we are bombarded with reports ranging from the real estate market is crashing further to the real estate market is recovering nicely.

If you want to follow the Sequim real estate market and the Port Angeles real estate market, you can access these free reports online at Sequim Real Estate Market.

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Top 20 Sequim Real Estate Posts of 2011

The real estate market is up, no it’s down, wait . . . well, it depends on what day you read the news and which news you’re reading.  Two days ago I wrote this in an article:

The Wall Street Journal reported that, “California’s inventory of unsold, previously owned homes shrank to a five-year low in December, in a sign that the state may be coming out of its worst housing slump in decades.  The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008 . . . In Northern California’s Santa Clara County, where inventory has dropped to 50 days from 243 a year ago  Amanda Garcia said she and her father Luis Garcia finally gave up a nine-month search for a home last month, after they kept losing out on homes priced in the highly competitive sub-$500,000 market.  ‘It’s more like an auction nowadays,’ said Ms. Garcia.”  [California Housing Shows Revival Sign, Wall Street Journal, January 23, 2010]

And this morning in Market Watch’s Economic Report, we have this title, Existing Home Sales Plummet 16.7% in December.  “The 16.7% percentage decline from November to December was the largest on record, dating back to 1968, the National Association of Realtors reported.”  But the same article then states that, “Sales in December were up 15% compared with December 2008.”

Watching statistics as they are reported and interpreted by the news media can be depressing and often misleading.  Retirees who are moving to Sequim and Port Angeles and buying or building their retirement homes are focused largely on what is best for them financially and consistent with their long-term goals.  They are intelligent and discerning, and their decisions are certainly within the context of a larger economic picture (their retirement fund, their savings, expected future income, etc.), but they are governed by their own wisdom about buying in Sequim and Port Angeles and not tossed about by every wind and rumor.  And that is a good thing.

Possibly Related Posts:

• The Real Estate Market Now – Rare Opportunities
• No One Can Call a Market Bottom
• Sequim Washington Magazine – Something New and Exciting
• The Housing Market is Strong and Weak
• Sequim Real Estate Market

I’ve heard the argument from a few people out there in the Internet world that they don’t trust Realtors, because Realtors ALWAYS say it’s time to buy.   First, that isn’t true.   I’m honest about how I preceive the market, and while I don’t have a crystal ball, I do have a degree in economics (with a speciality in monetary policy), law, and education, and now I’m am a Realtor.   But there have been some Realtors out there who have missed the mark so far, it’s downright embarassing.   Watch this video for one who got it wrong and one who got it right.

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Top 20 Sequim Real Estate Posts of 2011