Outlook for Long Beach
While no one knows for sure, I do believe we about to see a strengthening of the real estate market in our area. Now, to support my belief.
1. With QEII (Quantitative Easing II), the Fed in effect printed an additional $800 billion dollars used to purchase outstanding short and long term bonds. This action by the Fed caused bond prices to go down, causing interest rates to rise by approximately 1/2 percent. This interest rate increase reduced a Buyer's buying power by about 5%. A Buyer who previously was able to afford a $400,000 home, is now only able to qualify for a home valued at $380,000. I believe this action by the Fed will have an affect on Buyer's, in that they will now act before another such action is undertaken by the Fed.
2. (Un)employment is a prime concern. If people do not have a job, or fear job loss, then purchasing a home is not high on their 'To Do' list. We have seen a slight improvement in the employment numbers. While it is still very early in the cycle, I am hopeful recent trends continue, which should contribute to consumer confidence.
3. Traffic at open-houses is up significantly! The number of people attending an open-house is important, not only for the possible sale of that property, but for an agent to obtain new leads for Buyer's and Seller's. Also, we see a 'higher quality' of traffic, meaning they just aren't stopping in for the cookies. They are interested in the real estate market to the point they are more than willing to provide contact information (e.g. name, telephone number, e-mail address, etc). This tells us that people are showing true interest, not just out to fill an afternoon.
4. Lastly, just in the past week our office was able to record 30 sales! While I like to think First Team Real Estate has the best agents, I must believe there is more to it than our good looks and high level of skill. There are many fine agents and other strong offices. When I speak to these agents, they express a positive sense. Only a few are ready to 'walk the plank' by saying there is a turn-around on the near horizon.
I look forward to reading what you think of my hypothesis. Am I a gifted Seer of the future? Or, am I on a fool's journey? I do suspect I am somewhere in the middle of these two options. That said, I do believe we are looking at a strenghtening of the real estate market in Long Beach.