The October 2009 Dave Ramsey e-newsletter has these encouraging thoughts about foreclosures, new construction, relocation and the real estate market:
“Yes, foreclosures have been up lately. A lot of families who bought their homes with nothing down or stupid interest-only loans got stuck in a bad market and are losing their shirts. For a while this spring, it seemed like all the news media talked about was how bad housing was in America. But here’s the truth: 60% of the foreclosures occurred in only five states—Nevada, Florida, Arizona, California and Colorado.
Dave firmly believes that real estate will be the area that leads us out of the recession. It’s happened before, and it will likely happen again. One of the reasons is pent-up demand. Even though it’s a hard time to sell a house, people are still moving. They get transferred in their jobs or take a new job in a different city or need to move home to take care of their families. Life doesn’t stop happening when the housing market takes a hit.
The housing market is flooded with inventory right now, which has kept prices low. However, the cost of new houses really hasn’t changed much, because the cost of construction materials hasn’t changed. So, as the available inventory starts to burn off, prices will start to go back up because they’ll have to compete with the higher new home prices.”
