Going into 2011, I would like to take a snapshot of the real estate market in the Pacific Northwest. We were one of the last in the country to start showing a decline in home values, and we will probably be one of the last to come out of this decline. It looks like nationally, we have hit bottom. Some estimates were that in 2009 and 2010 we would fall back to 2000 numbers. We are now getting close to those figures. 2011 will most likely be the end of the decline. We probably won’t necessarily go up in value anywhere in the near future. As soon as unemployment corrects itself and the economy starts to move somewhat, I feel housing prices will rise after that. My estimate is that we’re in a seven year cycle and we’re about four years into it. We probably have three years before things start to take off again, with a lot depending on how inflation will affect the housing market due to the bubble popping. Will inflation push prices up? No one really knows. There is no time in history that we can reflect on as an example or parallel to what we just went through, so it is tough to say. In my opinion, in the NW, home price recovery will primarily be driven off a correction in the unemployment rate. When we see Unemployment in the 6% or 7% ranges, I think the housing market will soon follow those numbers.
Sr. VA Loan Specialist