Real Estate is a Long-Term Investment
The real estate market is cyclical. You have boom year when inventory is low and prices are rising, then you have the slow-down years when there is more inventory than there are buyers, and prices are stable. The boom created a misconception that real estate is a high yield, short-terms investment. It's not. And we we must not forget it.
There is no such things as a Bad Market
Regardless of where we are in a cycle, there are always plenty of people ready to buy and sell. In fact, 2007 existing home sales surpassed those of 2002, then a record breaking year. Today, buyers have more choice and favorable interest rates. With the help of a realtor, they can put together a good deal.
Economic Indicators remain Good
In addition to low interest rates, most areas of the country are experiencing employment gains, inflation is under control, and the gross domestic product is growing. These signs point to healthy sales this year.
Bad News should be put in Perspective
Every foreclosure is a tragedy, but when newspapers talk about foreclosures spikes, they ought to provide context: The problem is predominatly with subprime loans, which are held by less than 10 percent of home owners. Most subprime loans will never go into foreclosure, and not all those that do will be foreclosed on. The foreclosure rate on prime loans is only 0.6 percent. Here in Las Cruces, New Mexico, the foreclosure rate is very low and percentage wise, it has remained steady throughout the cylce. We do not used the subprime loans as a rule.
Realtor Magazine National Association of Realtors (NAR), January 2008 Issue, by the NAR President, Richard F. Gaylord article on "The Market".