Mixed Economic News stimulates Home Sales

This week has seen an incredible change in the the U.S. economy starting with the new GOP majority in the House of Representatives. There is no doubt that a lot of the Democratic spending bills will soon see new restraints by the House, thus reducing the possibility of more deficit spending, ?and that is good news for Wall Street. The Dow Jones Index soared more than 220 points yesterday(Nov. 4) based on positive expectations out of Washington and also because the Federal Reserve pumped $600 Billion into the financial markets.? Long term interest sank and again, that is good news for future mortgage rates and the impetus for more home buying incentives. In addtiion, other good economic news this week was that Retailers reported higher sales in October which many feel will indicate a stronger holiday selling season. All this is a leading indicator for the real estate market to base its resurgence on.

On the other hand, pending home sales saw a drop of 1.8 percent in the month of September. The National Association of Realtors said that its index, which started in 2001 with a base of 100, had dropped to 25 percent lower than its high of 107.8 in September of 2009.? A year ago, first time home buyers were rushing to take advantage of the 'first time homebuyers' tax credit. The Realtors economist, Lawrence Yun, felt that some of the weakness may reflect the moratorium on foreclosures that have been imposed on most sectors of the country. The inventory of distressed properties in the housing market is expected to grow because of foreclosure stoppages related to legal problems.

My prediction is that the foreclosure stoppages will slow down soon and the inventory of distressed and short sale properties will stimulate a surge in home closings in the coming year. We have not seen this type of market in Vail before, but now is the time to start a renewed search for bargains in this area as we have some of the best insights of any brokerage firm around to help you find the best deals. Call me, Judd Babcock, at 970-376-3230 for updates on bargain prices in our area.