The Winds of Change: 2006 Real Estate Market Trends

As the month of January comes to a close there has been much speculation about the state of the real estate market, both nationally and locally. As we prepare for the future, we must take many factors into consideration. Change is the natural progression of life, for humans, our Universe and even the real estate market. As home buyers, sellers and real estate professionals, we must be attentive and knowledgeable in order to make the best investment decisions. In this article I will share my views on the current local and national real estate markets. I will also discuss the views of some influential people in the real estate industry. The National Market Adjustment Recently, Frank Nothaft, Freddie Mac vice president and chief economist, stated "Our outlook for the housing industry continues to be that mortgage rates will remain affordable for the rest of the year at least, keeping the industry alive and well into the foreseeable future." This bodes well for real estate professionals and consumers throughout the country, even in regions where the market seems to be slowing down considerably. According to Blanche Evans, writer and editor of Realty Times, in her article "Realty Times Outlook - What's Normal" the National Association of Realtors believes in 2006 housing markets will "return to normal". "In 2006," Evans states, "experts are calling for more balance in the rate of price growth, says the NAR, as well as more balance between buyers and sellers in local markets." David Lereah, NAR's chief economist, says "more modest gains are healthy." "We don't need to break a record every year for the housing market to be good," Lereah continues, "in fact, cooling sales are necessary for the long-term health of this vital sector. A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong." As the market becomes more balanced during 2006 buyers will begin to recover some of the advantages they have sacrificed over the last few years, such as more time to evaluate different properties and to make offers. Nontraditional mortgages such as 80/20's or ARM's will become less popular and 30-year fixed rate mortgages will be the preferred option. Hampton Roads and the Tidewater Region of Virginia As the national market continues to evolve it is important to pay attention to our regional real estate market trends as well. Location is an incredibly important part of analyzing and predicting real estate market changes. At the end of 2005 the Virginia Association of REALTORS