Real Estate Outlook Mixed

Depending on which news channel you turn to these days, you’ll hear good news, and bad news, about the real estate outlook.

Probably the most upbeat forecast of all the real estate news circulating these days comes from the country’s top group of forecasters, the National Association of Business Economists, which has a great track record in predicting trends and market turns. After its latest survey of members released recently, the association said the following: “The good news is that the deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worrying about inflation.”

The consensus forecast from the business economists is for the Gross Domestic Product, GDP, that’s the main measure of the economy’s output and activity — to grow by 2.9 percent, and for new housing starts to jump by an impressive 38 percent.

That is good news because home resales tend to be closely tied in with GDP: If the overall economy is flush and growing, that supports higher home purchases and sales.

The big negative everywhere is jobs. The recession may be ending in some areas, but not in job losses, with unemployment currently hovering right at the 10 percent level, which is a big factor holding back the real estate housing recovery.

The biggest plus for housing right now is the continued low interest rates, and the first time buyer tax credit still in existence for a few more weeks, unless it is extended by Congress, which is what many in the real estate sector are crying for to keep the uptrend from stalling out.