I will be talking in more detail in my monthly Greenwich Real Estate email about this presentation (I attended a couple days ago). If you'd like to sign up for my monthly mailing you can sign up on the right side of the home page (GreenwichCT.com) or you can email me at email@example.com.Here's a preview, by Olivia Just, of the presentation.
After driving through the quiet, green-lawned section of Greenwich to the Belle Haven Club on Wednesday morning, Lawrence Yun said it was easy to see why the town is such a prime spot for real estate.Yun, chief economist at the National Association of Realtors, said that in Greenwich, year-to-date home sales are up 2 percent from 2010, more than double from 2009.Speaking to a full audience of real estate professionals at the posh club, Yun explained his view of the nation's housing market.It's "trying to recover. The decline appears to be pretty much done, but the question is the strength of the recovery," Yun said. "We have a constantly rising population, yet home sales activity is currently at about 1998 levels, so there's much lower home sales in relation to population. But population in itself does not create housing demand."Yun's comments come on the same day that his Chicago-based association released a report showing an index of home resales rose 8.2 percent in May from April.So far, existing home sales have responded to the now-expired federal home buyer tax credits introduced in 2008, but new home sales, which make up only 5 percent of the market, haven't, a point that is continually focused on in reports on the state of the housing market, Yun said."It's not due to lack of demand. The reason new houses are not selling is because builders are not building," Yun said. "This is a reflection of lack of supply rather than lack of demand."A contributing factor to this dilemma is that builders haven't been able to get construction loans because they don't have government guarantees."It's an interesting point that people do want to buy new houses and people are not building new houses," said Barbara Stephens, a realtor with Sotheby's in Greenwich who attended the event. "If that's the finger in the dyke, then why isn't that happening? That's something I'm going to look into."Yun noted that homeowners who purchased their homes in 2009 are doing well and that the projected numbers for 2010 look equally positive. Pending home sales also look to be "a solid 13 percent higher" than a year ago. Both of these are optimistic signs, Yun said.However, the chief economist also predicted that prices could potentially increase and the country could run into a housing shortage in the next few years."Once there's a housing shortage, there will be price increases as well," Yun said. "These price increases could be modest increases or sharp increases; a sharp increase would not surprise me. A person sitting on the fence today, if they wait, will have to face these increases. But, we want buyers to be in a strong financial situation and not be overstretched."