Real Estate Economic Outlook
Fannie Mae has a positive real estate economic outlook for 2011, and this could spell good news for the real estate market as wsell as the overall economy. “The economy has regained momentum entering 2011 and we see significant improvement in the economy’s ability to grow compared to 2010,” said Doug Duncan, Fannie Mae’s chief economist. Below are some of the key details from their real estate economic outlook report.
Real Estate Economic Outlook | Housing Starts
“…housing starts are predicted to increase 17.3% and hit 710,000 this year, with another 47% increase to 1.1 million in 2012 and another gain of 42% in 2013 to nearly 1.5 million.”
To put these statistics in perspective, there were only about 510,000 housing starts in 2009. Therefore, they are predicting an increase of housing starts, which is always good for the economy as it puts builders and laborers back to work.
Real Estate Economic Outlook | Home Sales
The real estate economic outlook study also predicts that more home sales will occur in 2011 than 2010, an overall projected increase of 4.5% up to around 5.5 million houses to be sold. While more homes are expected to be sold, the price of homes is expected to decrease.
According to the real estate economic outlook report, …”the median new home price in 2011 is expected to drop, as is the median existing home sale price, down 2.1% to $214,500 and 2.1% to $167,900, respectively.”
Falling home prices are suspected as banks will continue to unload their inventory of distressed assets at a discount. In fact, I’ve read from other sources that the median home prices may fall as much as 5%.
Real Estate Economic Outlook | Mortgages
Of course, the biggest hurdles to selling houses is obtaining financing. The government sponsored agency had the following to say about the mortgage industry:
Mortgage originations will drop to $1.04 trillion this year from $1.53 trillion last year. Fannie Mae also expects mortgage rates will increase in 2011, but not substantially. “Fixed mortgage rates are projected to rise throughout the year, but to remain below 5.5%,” the report said. “Larger increases in mortgage rates without corresponding acceleration in job gains would pose a risk to the housing recovery.“
Overall, Fannie Mae expects the U.S. economy to “accelerate and sustain” above-par and less volatile growth in 2011 based on increased consumer spending and growing clarity concerning fiscal policy. According to the agency’s real estate economic outlook, Fannie Mae anticipates the economy to grow by 3.6% this year with consumer and business spending leading the way. This prediction was revised upward from 2.8% in December. http://www.housingwire.com/2011/01/19/fannie-mae-housing-starts-to-triple-by-2013-to-nearly-1-5-million
Real Estate Economic Outlook | REI Maverick Phill Grove’s Prediction
Outside of double digit real unemployment figures, bank financing has been the biggest hurdle to the recovery of the housing market. Unless banks begin lending again, the traditional real estate market will suffer. Banks cannot unload their inventory unless buyers have access to funding. Distressed homeowners cannot sell their houses to buyers following the stringent conventional lending guidelines.
If you are a real estate professional relying on bank to fund transactions for your buyers, your economic outlook is grim. The wave of the future is Assignment of Mortgage Payments. The basic premise of the assignment of mortgage payments system is selling ‘unsellable’ houses to ‘unloanable’ buyers through owner financing. Real estate professionals who can educate sellers on how to owner finance their houses and help them sell their houses to buyers who can’t qualify for conventional financing will have a rosy real estate economic outlook the next couple of years.
About Phill Grove: Phill Grove is the Founder and President of REI Maverick, Love American Homes, and Hippie Hollow Homes, LP of Austin, Texas. Phill is also the creator of the Assignment of Mortgage Payments System. The Assignment of Mortgage Payments System is designed to help investors facilitate selling ‘unsellable’ houses to ‘unloanable’ buyers at market rate, reducing foreclosures and preventing the median housing prices from falling. Since 2003, Phill’s companies have managed over 1000 short sales, and bought, sold, and/or renovated over 100 foreclosures, renovations, and construction projects working with over 100 partners and clients. However, Phill’s focus is solely on utilizing the Assignment of Mortgage Payments Syste. Please visit www.REIMaverick.com for more information on Phill and the assignment of mortgage payments system.
Article: What is Fannie Mae’s Real Estate Economic Outlook?
