Last week I attended the Fall Forum put on by the St. Paul board of Realtors. I listened to Lawrence Yun's as he talked about the economy and the housing market. Yun has quite a resume but the reason he came to St. Paul is because he is the Chief Economist for the National Association of Realtors.
He did not sugar coat anything but his outlook is fairly positive. He says that we are in a recession and that we just don't know how deep it will be or how long it will last.
I wrote a post a couple of weeks ago about the clearance sale that seems to be going on in our local market. The homes in the lowest price ranges are selling and I speculated as to what will happen once they are sold. Yun says that when they are sold and the inventory goes down the market will be more balanced and stable, which means it won't favor buyers as much and the prices will stabilize as the inventory goes down.
In some neighborhoods prices seem to be stable. The neighborhoods that have seen the sharpest decline in prices this year are the neighborhoods with the highest numbers of foreclosures in them.
The inventory of homes on the market in St. Paul has been declining. Yun predicts that there is a pent up demand and that home sales will be stronger in the spring. The way I look at it home sales are always stronger in the spring in this part of the country so I would say it is a safe prediction.
I guess what we are all wondering is if we have hit bottom or if home prices will continue to slide in the metro area. It is kind of like the stock market in that we won't know for sure until after the prices stabilize or go up, but at a much slower pace than they have in the last few years.