Charlie Young might have as good a feel for the health of the nation’s housing market as anyone.
As president and CEO of New Jersey-based ERA Real Estate, which has more than 2,400 franchised residential real estate offices worldwide, Young regularly visits cities, tracks national housing and economic data and hears feedback from consumers and residential brokers.
What he’s seeing, Young says, is a genuine rebound of the single-family market.
“We think we’re in a sustained recovery,” Young said Tuesday in Colorado Springs. “We see it as not a big jump or a big spike, but a steady improvement, month over month, quarter over quarter, year over year.”
Young was in town to present an economic forecast to ERA Shields Real Estate in the Springs, a local franchise. He also recognized ERA Shields as one of ERA’s top 15 brokers in the nation for the 12th straight year. ERA Shields, meanwhile, announced it renewed its franchise agreement with ERA for another 10 years.
Young sat down with The Gazette to discuss single-family housing. Some highlights:
On what’s driving the market improvement: First-time homebuyers have propelled the market; even during the recession, households were being created and needed a place to live. Investors also are a big part of the recovery; cheap borrowing rates and affordable prices have made homebuying popular for many investors. Move-up buyers also are returning to the market, as unemployment nationwide has slipped below 8 percent.
“Consumers are more confident. They have always seen the historically low interest rates we’ve been dealing with the last couple of years, but now they can act on it.”
On the pace of the recovery: ERA brokers have characterized the market’s improvement as “being in the midst of a sustainable recovery. I don’t know what that means in terms of how long it lasts. But we don’t see it as a spike ... that’s going to now correct. We think it will carry through into ‘13.”
On the future of today’s historically low mortgage rates: “Everything we are seeing is that the mortgage rates will stay in this general range for the balance of the year, and then you might see some mild upward pressure. But we’re not expecting there will be any big jump in mortgage rates.”
On potential problems that could stall the recovery: Are there enough homes listed for sale to sustain the recovery? Nationwide, listings are down 21 percent from a year ago; in the Pikes Peak region, January’s listings fell 7.2 percent from a year earlier.
“You have buyers in the market, and they don’t have product to buy. That’s going to be an issue. That’s probably the biggest thing I worry about.”
Among reasons for the declining inventory: Homes are selling at a faster rate today, which is diminishing supply, while some sellers might not realize the recovery’s strength and haven’t listed their homes for sale. Also, tight borrowing rules are making it difficult for some buyers to qualify for a mortgage.
On whether we’ve moved from a buyer’s market to a seller’s market: “As a consumer, you shouldn’t spend time worrying about whether it’s a buyer’s or a seller’s market. You should spend time worrying about what your own needs are. If...you need to downsize, you need to upsize, you need to relocate, that’s a reason to move. If you’re on the buy side, and you have a life need that drives the purchase of a home, you do that. Even with the recession, over time, owning a home has proven to be a sound, stable investment. And trying to time the market one way or the other doesn’t really work.”
Contact Rich Laden: 636-0228 Twitter @richladen
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