Today at the St. Louis association of Realtors (SLAR) local real estate experts gathered over lunch to hear guest speaker

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research of the National Association of REALTORS® speak about “Market Trends & Economic Forecasting”

Yun discussed the U.S. economy and the impact that it has on the housing market. He began stating that 1/3 of home sales are distressed sales (i.e. short sales, foreclosures, REO’s) and that there are about 700,000 more vacant homes than the market typically holds. He spoke about what is driving the market today, how this effects the consumer and his views on the success of the late tax credit.

According to Yun, 4.4 million Americans were able to take advantage of the tax credit. Approximately 2/3 of those were first time home buyers while the other 1/3 were repeat buyers. He also stated that he felt that the tax credit was a success. It helped to move inventory through the market and helped to move buyers “off the fence.”

Yun stressed the significance of low interest rates stating that if you look back in time, today’s rates are even lower than rates during Eisenhower’s Presidency in the 50’s. This should be helping to increase consumer confidence, however Yun suggested that it is psychology that is driving the market today. Even the consumers who are willing and able to purchase a home are holding out longer than they typically would to make their purchase.

Consumers whom are willing and able to purchase a home should do just that. Housing affordability is high due to the low interest rates and low housing prices. Yun simply suggested that buyers be sure to stay within their financial means when purchasing a home.

With willing and able buyers holding out, the market is seeing a stockpile of inventory. Yun explained that once 10 months of inventory accumulate, according to economic philosophy, prices should then decrease. However, Yun also stated that it would be difficult for prices to drop much lower than they already have.

Yen concluded the lunch stating that it is now psychology and consumer confidence that is driving the market. The U.S. is in a “slow recovery,” with interest rates low and job creation on the up-swing, Yun dubbed this era to be “The Great Recession.”

Laura Poole
Hermann London
636-284-8828 cell
314-802-0797 x725 office
7350 Manchester Road
St. Louis, MO 63143
LauraP@HermannLondon.com