Markets go up, markets go down. Sometimes we see it coming, sometimes we don’t. It all depends on what consumers and businesses are buying — and when. How can we tell if and when real estate will recover?
We need to ignore short-term fluctuations, such as the spike in home sales last November, when buyers thought the first-time tax credit would expire. Then sales rates dropped significantly when Congress extended the tax credit and removed that original sense of urgency.
We need to pay attention instead to long-term forecasts.
Consider that homeownership increases by about 1 million each year. There are 4 million births, 2 million deaths, 1 million new immigrants, 2 million weddings and 1 million divorces each year. All of those events spur people to buy and/or sell a home.
Crunch the numbers, and you’ll see that we can expect about 60 million home sales in the next decade. Regardless of the subprime mortgage debacle, and the ensuing foreclosure crisis, real estate will remain on the rails — an unstoppable freight train barreling toward homeownership.
Just as surely as the market sees recovery, buyers and sellers still need representation in these transactions. A recent survey by the National Association of Realtors reveals that 80 percent of buyers and sellers would recommend their Realtor to family and friends. That’s a loud signal of the value of representation.
— Elaine Abercrombie, a broker with Abercrombie Fine Homes, is president of the Santa Barbara Association of Realtors. She can be contacted at elaine@AFHomes.net.