President's Message

   July 2008

   This month I’d like to talk about good news instead of all the bad news we hear every day from almost everywhere we turn.

   One of my good news stories came from my informal polling of a few big property managers’ offices. What I found was a strong rental market with good phone activity. Upon looking at the rental sheets at the property managers, I see very few available units under $700 per month (mainly apartments). One property manager said that even the houses above $1100 per month were renting quickly. In months past, it’s that price range that was suffering because all the builders were renting their houses that wouldn’t sell and were flooding that market.

   From the point of view of real estate sales, I believe homes renting for more than $1000 per month are full of people waiting to buy. If that is true, and market conditions turn favorable, then those people would likely be the first to bail out of the rental and buy a house. My thoughts on that are that several things have to all line up at the same time for those people to buy a house. First thing is the market has to stabilize and stop falling (at the time of this writing that has not happened). Other factors that will play a big role are that those people should have a credit score of 660 or better, have 20% down (to avoid PMI insurance), and the guts to pull the trigger in spite of higher interest rates and sticker shock at the gas pump. I personally think that people may hunker down in their reasonably priced rentals for quite a while and just watch and wait.

   The only other good news is that if you are an investor, the price of houses continues to come down. A buying opportunity may be coming. If you are trying to sell or refinance a house then this is just more bad news.

   It’s summer time! I say just go camping, hiking, water skiing or whatever you love doing. And purposely don’t watch the news for one week and see if you don’t feel better.

See you next month!
Terry Luelling