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In my previous blog concerning Dr. Yun's visit to the Greater Tampa Association of Realtors and his lecture I summarized his lecture as best I could. Here is a link to hear Dr. Yun summarize in his own words his outlook on today's housing market, not only in the Florida market place but nationally as well.

Click on the link below to hear Dr. Yun .

http://easylink.playstream.com/gvimedia/NAR/NAR_Midyear_Mkt_Update.wvx

Additionally I would like to tell everyone who has asked me in the past few weeks about the housing market conditions that this is the best time to purchase a home in 35 years. The inventory is higher than in years past and interest rates are historically low. This is a fantastic marketplace for people who want to purchase a home. It is a great long term investment.

I would like to take a moment to thank Dr. Yun for giving his lecture at the Greater Tampa Association of Realtors (GTAR). Dr. Yun is the Chief Economist and Senior Vice President of Research at the National Association of Realtors and his accomplishments are too numerous to list. The topic was the overall market conditions in the Tampa market and how it compares to the national averages.

There is a high inventory of existing homes. This is not a secret, however, I was surprised how the inventory related to the speculators and their homes in the market. 80% of homes that are on the market are from people who need to sell their homes to be able to purchase another elsewhere. I knew this number was significant but I was not expecting 80%. This is good news for the people who are looking to purchase and for the Realtor that is handling the transaction. This means that after the transaction is completed that there is a buyer ready and able to purchase another home.

The seller has a significant emotional and psychological hurdle to overcome to price the home for a sale in this market. To paraphrase Dr. Yun, "when the prices rise in the housing market it is easy for the homeowner to add to the price of the home. However, in a market that the prices are declining the homeowner is reluctant to lower the price of the home. Thus the price becomes sticky on the way down". The homeowner is reluctant to lower the price of his home for several reasons; 1. They do not want to lose equity that was accumulated in the home in prior years. 2. They have sweat equity in their home and feel that it devalues the work that was pun into the home. It is very important to remember though that even though the homeowner lowers the price of their home to give it a better opportunity to sell, the home that they are going to purchase has experienced a similar loss in price and therefore the seller does not suffer the loss. For example if you had a home worth $200,000 three years ago and now the market dictated that it sold for $150,000 and after the sale the homeowner wanted to buy a home that was worth $250,000 three years ago but is now listed for $200,000 you would have the same lower price for both homes and the second home is still $50,000 higher whether or not it was purchased in a sellers market or a buyers market.

New home construction in the Tampa area is very low meaning that there is very little new vacant homes adding to the inventory thereby allowing the existing inventory to be taken off of the market.

Freddy mac and fannie mae are getting ready to start purchasing jumbo loans from the banks thereby giving the banks more liquidity to lend money for higher priced homes.

There is a push in the congress to allow 1st time homebuyers a $7500 tax credit for their homes. This is big.

We all know that there are a lot of people on the sidelines that are waiting for the bottom of the market. I get this question all day long. All that I can say is that home buying is a long term investment not a cash machine. The mortgage rates are at a historically low level and the price of homes are at lows not seen in decades. If you wait for someone to tell you that the market has bottomed then you have missed the bottom. By the time that you hear about it on the news it's already too late.