Real Estate Recovery: Are we there yet?

Although the answer is still "no," I continue to believe that brighter days are not so far ahead in real estate. The article I've reprinted for you below, by LawrenceYun, the chief economist of the National Association of Realtors, analyzes American population growth and its effect on home ownership as another predictor of an expected rebound in the real estate market. We still face a challenging 2011. Sellers still need to be diligent in making sure property is priced right and shows well. We are still in a buyer's market. But, just like you would say to the child in the back seat who continually asks "are we there yet" our watchwords are patience and optimism. We are getting there.

Sunnier Skies Are Likely on the Way, by Lawrence Yun, March 2011 Realtor Magazine

Thanks to population growth, the number of home owning households in our country normally rises by about 1 million each year. But economic conditions will sometimes throw a hurdle in the way of that.

We faced a big hurdle in the early 1980s when interest rates rose to as high as 18 percent, and we faced another hurdle after the housing "bubble" burst. The number of home owners did not grow from 2005 to 2010, even though the U.S. population grew to 308 million people—13 million more than in 2005. Instead, during that period the home ownership rate dipped to 66 percent from 69 percent.

We know those bubble years were fueled by artificial demand, so the 69 percent home ownership rate we had in 2005 was likely artificial as well. Thus, today’s 66 percent home ownership rate brings us back to a sustainable level.

When you combine this healthy home ownership rate with our country’s projected growth to 340 million people by 2020 (and 420 million by 2050), you can bet our industry’s long-term prospects remain bright. It’s the short-term economic pressure we have to worry about, but even here the news is brightening.

Manufacturing output has been rising. The stock market has recovered nicely. Companies are flush with cash. Consumer confidence has rebounded from very low levels, and jobs are being created.

Against this improving picture, we can expect to see some release of the demand that’s been building up for the last three years. Rising rental costs will also likely tip more renters into home ownership.

Putting these and other factors together, existing-home sales are projected to rise 8 percent to nearly 5.3 million units nationwide this year and possibly to 5.5 million in 2012. At this level, home ownership is solid, but it’s also sustainable given our level of population growth."

If you have any questions, please do not hesitate to call me. You can reach me, Don Ricedorff, at The Wells Group 970-375-7014, don@frontier.net, or at my website at durangorealproperty.com.

Don Ricedorff is a licensed real estate broker in the State of Colorado, with 18+ years of experience, and he resides in Durango Colorado.He has numerous real estate designations, which have provided him with an unparalleled education to assist his clients. The designations include:

CRS, Certified Residential Specialist
CRB, Certified Residential Broker
CCIM, Certified Commercial Investment Member
CDPE, Certified Distressed Property Expert
ABR, Accredited Buyer Representation
GRI, Graduate of Realtor Institute
RSPS, Resort and Second Home Property Specialist
CIPS, Certified International Property Specialist
SRES, Senior Real Estate Specialist


He is also an active volunteer in the community and his church. His highest aspiration is spending time with his wife, Janet, and his three children Kelly, Katie, and Kyle. His other interests include playing tennis, fly fishing, hiking, boating, and water skiing.