WHAT MIGHT BE AHEAD FOR 2009, and BEYOND

12.25.08 - 01.01.09

Well, the last half of 2008 has left a lot to be desired in the NW CT real estate "world". The first half of 2009 doesn't appear to look a whole lot better. There is one really bright spot ‘attempting’ to stimulate it: low mortgage rates.

I saw an article over a month ago suggesting interest rates would be below 5% by the beginning of 2009. Last week’s short term rate reduction to below 1/2%, by the Fed, certainly will send mortgage interest rates down; in fact they were already at 4.75% (no points) here in CT as of December 17th.

This should stimulate quite a bit of refinancing for those able to meet the credit standards, and should we see rates head a bit lower, toward the 4% number. If this happens, it could lure buyers into the market, much as bargain car prices that are now available, are doing in the car industry.

However, this could be limited to a (very) small segment of people who might be able to take advantage of such financing rates. I am afraid that any "extra low" mortgage rates will not jump start our market in any sustained way, although I hope I am wrong. Cash is king and 20% or more is required to get the best rates available.

Values also are probably not going to turn upward any time soon. I think that those of us that have been in the business for a long time, are poised to see a "new" type of real estate market around here for the next few year. There is a lot of "money" sitting on the sidelines, but I think that as far as real estate goes, it will be spent very cautiously, not making most sellers very happy in the coming months. 2009 will be very interesting around here, I think.

I wish all my readers a Merry Christmas and a Happy New Year and invite anyone who wants additional input on this subject to call or email me.


©2008 R. Leech features.