What's Coming In 2008?

"What," we gingerly ask, "is the economic outlook for 2008?" "We've been hammered for two solid years now... It's time for an upswing... right?" My crystal ball says that 2008 will be pretty much like 2007. Hey, don't get mad at me. I'm not like - you know - the media or anything like that. It won't be horrible, yet it won't be like the run from 1997 to 2005 either. I believe the end is in sight, but some things have to happen first. I suppose you could say I'm optimistically pessimistic (wait, or is it pessimistically optimistic?) We (real estate professionals) are supposed to smile and say things like, "What downturn?" and "Of course we'll take your listing at the peak 2005 price... we'll just run more ads." and "Everything would be better if the media would just write happier stuff." etc., etc. Well, here's the deal. It's like a four-legged table... with four wobbly legs:

1. The Housing Slump is very real in most areas of the US. Here in Palm Coast/Flagler Beach, we've got an easy two year inventory... closer to two and a half years. Don't even ask about condos. We are currently dominated by foreclosures, short sales, and builder give-aways. The good news?... Prices are nearing the bottom - and this should be a catalyst to some buying activity this year.
2. Credit is tighter now. That's bad - yet a good thing, overall. Sub-primes are a memory. But even as prices fall, remember that all the drywall guys are in Tennessee and North Carolina working now. Jobs are hard to come by, so even with six% loans, buyers are scarce.
3. The $dollar$ is weak on international markets. That's bad now, but as prices get to the bottom, we should see foreign investors (especially Canadians) come back to Florida with strong Euros and Loons.
4. Buy any gas lately?

So there you have it. 2008 should see the bottom of the market - and that's a good thing. The long-awaited "turn around" should start. But remember, you don't do a "180" on a nuclear carrier quickly. Throw in Iraq and political unrest, continued mortgage shakeout with more foreclosures and short sales... along with upcoming elections, etc., and you don't see much in the way of real recovery until 2009... Can't wait :-)