Recent economic news

Overall economic trends continue to be down, but offset this past week by some positive news:

• Treasury Secretary Tim Geithner’s release of the details of the government’s plan to reduce toxic assets held by banks is an important step in stabilizing the banking system
• The S&P 500 stock market is up 21% since March 9, 2009
• The Fed’s investment of another trillion dollars to purchase mortgage backed securities and Fannie Mae and Freddie Mac debt prompted mortgage interest rates to fall yet again
• The National Association of Realtors announced that exisiting home sales rose by 5% in February
• The Federal Housing Finance Agency’s monthly housing price index estimated that home prices rose 1.5% from December to January

The paradox of our sagging economy is that there hasn’t been a better time to buy a home in a decade.  Buyers who are able to see past the immediate future will take advantage of a golden opportunity.  In a few years, they will look back and realize they made an excellent decision.

Buyer activity is increasing, which is great, but it won’t lead to immediate price appreciation.  There is too much inventory to get through.  That’s why it is more important than ever for sellers to price their properties right from the outset.  If they do, they will benefit from the increased optimism of buyers venturing into the market.

Whether these events represent an uptick in a still-decreasing trend line, or the start of a stabilization of our economy is yet to be known.  But after so many months of negative trends, it is welcome news for our economy and our local market.