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Real Estate History - The Real Estate Rebound of 2007

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                                   Real Estate Rebound Of 2007 - Has It Already Started?
                                                                 By Eric Rogers



    As we head into the first month of spring, there is no doubt -- real estate activity has increased
significantly in many parts of the country. This leaves many to wonder: is this the beginning of the end
of the real estate market downturn? The spring market is looming -- the big question is, what type of
market will it be? 2006 is no longer new news for anyone. We hit a market downturn -- after 5 years of
hot growth, it was bound to happen. But more important is how long will the downturn last? This factor
is vital for anyone thinking of putting their home up for sale in 2007.

This fall, we saw prices drop in many places around the country off of strong values in 2005. This isn’t
a fact that homeowners are thrilled about. But it also has to be tempered by the exceptionally strong
housing market of the previous 4 or 5 years. In many parts of the country, the depreciation of 2006 only
erased a small portion of the equity that had been building.

The market didn’t just affect pre-existing home sales. Builders faced similar difficulties in 2006. Many
responded by slashing prices and offering increased incentives to entice buyers. In several cases,
builders even chose to cancel planned developments to wait out the market downturn.

This fall, there were two trends that were apparent: 1. homes had to be priced competitively and in top
condition to sell and 2. buyers tended to be very choosy and spent time shopping around. This second
trend contributed to the longer-than-usual market times of many homes. It wasn’t unusual for
well-priced homes to be on the market a long time before selling.

There were several main factors that contributed to the market conditions we all experienced in 2006.
Many experts feel that the Federal Reserve (Fed) was too aggressive with interest rate hikes. Often,
changes in the interest rates take a while to reverberate throughout the economy. Instead of letting the
market react to small interest rate changes, the Fed pursued an aggressive series of hikes.

Also, people are discovering that the media itself was largely responsible for a good deal of buyer
uncertainty in 2006. For years, every “pundit” out there had been predicting a market crash and for the
past 5 years or so, the market held strong. Then, the Fed started raising the rates and things started to
cool. Of course, everyone with a microphone started piling on the idea of a “market bubble”.
Unfortunately what happened was “Chicken Little Syndrome” -- suddenly everyone thought the sky

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was falling and the market began its downturn - all while interest rates stayed reasonable and housing
prices good.

The result was 2006. The next question is obvious: what’s next? Here’s where we have some good
news. The general feeling among the true real estate experts -- the REALTORS who are out in the field
in your local market day after day working -- is that 2007 will be the end of the downturn for many
areas of the country. We are already seeing signs of this all over the United States. Here in the
Midwest -- particularly the Fox Valley area west of Chicago, things have already started to pick up --
phones are ringing, buyers are buying and sellers have a very optimistic attitude about the next few
months. In fact, many REALTORS are predicting a hotter-than-normal spring in 2007 that should end
the downturn, signal a soft landing and return us to balanced growth in our local real estate market.

The biggest factor that should influence the spring market is the current pause (or end) in interest rate
hikes. If the Fed holds steady to this policy going into spring, buyers should take it as a sign that the
market is leveling out. Combine this with the fact that many buyers most likely held out towards the end
of 2006 and we’re looking at a larger-than-normal pool of buyers that should commit to a purchase this
spring. Also, consider the fact that we are still sitting on a large inventory of unsold homes, some of
which are priced very attractively. Basically we have a convergence of a large pool of eager buyers
and a large pool of unsold homes at great prices -- the outcome should be a lot of activity this spring.
So, how should all of this affect buyers, sellers and homeowners?

If you are a homeowner, 2007 should return us to a steady rate of appreciation. It probably won’t be as
great as from 2002-2005, but we should return to a fairly modest, yet sustainable rate of appreciation.
Sellers should be particularly interested in a rebound this spring. What was a very difficult and trying
2006 market should turn into a much better time to put a home up for sale. The most important thing
for sellers to understand is that the inventory of unsold homes should still be high this spring—but
buyers should be buying. This points to several factors: sellers need to make sure their homes stand
out of the crowd—both in condition and price. If this is done correctly and your REALTOR works hard
at marketing your home, its time on market should be greatly reduced from 2006 levels.

Buyers should see the rebound as a last call of sorts. If you’ve held off buying—for whatever reason,
it’s time to commit to a purchase. In fact, buyers should really consider making a purchase in the next
month or two in order to gain full advantage of the 2006 market conditions before they level out. Those
that wait until summer or fall might miss the current buyer’s market and find more competition and
higher prices. Another benefit to buying in the short term is that interest rates are still relatively low and
there are some great programs out there for buyers. While we all expect the Fed to hold steady with
rates, we don’t expect them to drop anytime soon. So the current rates might represent the lowest
they’ll be for the foreseeable future.

2006 will go into the books as one of the most difficult years for real estate in the past decade. Looking
forward to 2007, we can expect the market to level out to a sustainable pace. Whatever your real
estate plans are in the coming year, it will be important to keep track of current market conditions. If
buying or selling is in your near future, it’s important that you seek professional assistance to help you
make the decisions that will benefit you the most.

Eric Rogers is a full-time, award-winning REALTOR with Century 21 Pro-Team in Aurora, Illinois. Eric
is considered a local real estate expert for the cities of Naperville, Aurora and surrounding Fox Valley
communities. Find out more by visiting http://www.illinoislandandhomes.com/



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                                                     Make Money in Real Estate
                                                             By Heather Seitz



 The real estate bubble may have burst, but the fact remains that real estate is still an attractive
investment. You just have to be able to look at the advantages that are presented in the down
economy.

Some say that the real estate market is in a depression. Others call it a recession. Others are in
complete denial. The third parties are usually those in politics or real estate agents. Anyone who is
trying to sell a home knows it is bad out there. But the good news is that as bad as it is for sellers, it is
a great market for buyers.

Anyone who has money to invest should invest part of it in real estate. There are three different
reasons for this: The interest rates are rock bottom and not likely to get any lower, the housing prices
are lower than ever and the market will eventually rebound. You can still make money today in real
estate; you just have to look at the property as a long term investment instead of the quick buck.

The days of flipping real estate properties that are accumulating so fast in value that you cannot keep
up with them are gone for now. They will most likely return, but not for a while. Now you have to work
with what you have which is a real estate market in which there are a lot more sellers than buyers.
This puts the buyer in the driver's seat.

Along with the fact that it is a buyers market, you can also work with the fact that the mortgage rates
are lower than ever. So you have an opportunity to buy low because the market is saturated with
homes for sale and not enough buyers as well as an opportunity to get a good loan package because
the rates are low and lenders are dying to make loans so that they can stay in business.

If you have money to spend on real estate, you are in a great situation today in the real estate market.
Look at the real estate investment as a long term investment instead of a short, get rich quick scheme.
You can make money when the bubble begins to grow again, and it will. The real estate market goes
up and down like the stock market. It will rebound.

You can make money today in real estate but you have to make smart choices. Purchase property in
areas where the housing prices have remained stable. Also look at the growth in your area. Where is
the next boom likely to hit? This is speculation, but if you track trends in the real estate market and do
a little bit of a study, you can see the next area where developers will likely target. This is a good place
to buy real estate, even if it is just a vacant lot.

Real estate is usually always a good investment, especially if you plan to live in the property.
However, it should be looked upon as a good long term investment and not a way to get rich quick.



Heather Seitz is a national real estate investor, trainer and publisher and has worked with top advisors
worldwide. To get current and accurate real estate investment tips and advice, visit http://www.
RealEstateRant.net and find out how you can get $852.90 in FREE real estate investing information
delivered to your front door.


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