Real Estate Updates

The first two months of this year dawned with weak figures for real estate. But with March, a slow but steady reviving of the market was already felt. Home sales are making improvements now, not as great as last year, but compared to January and February, March brought in a needed shift.

The factors affecting the slow sales noticed on the very start of the year are over-expansion of the real properties on 2004 and 2005 and then, there’s the rising cost of construction. The consumers, being the end-buyers, shoulder the brunt of these rising costs and are therefore charged still with expensive units.

There has also been a decrease in new home permits lately. It has decreased by 5% since last year, an indicator of a slowdown in construction for the year 2006. There was also an increase in the foreclosure rate, up by around 20 percent compared to last year. Expected are more foreclosures for the next months with investors purchasing properties with low cash to sustain the payments.

But now may be a good time to make a purchase, with the situation being a buyer’s market. Good incentives have been offered by numerous developers in the hope of selling their houses in the soonest time. Trying to flip the market to their side, developers are resorting to incentive programs to lessen the high inventory of properties still unsold.

With this trend, the buyer’s market may be short-lived. Buyers may choose to grab all the incentive-filled offers while there’s a favorable shift to their end. However, with stats updates on the steady climb of sales, operations might be back to normal again for most players.

Although a slowdown in construction has been noticed, with some employees laid off… analysts seeing this month’s progress are quite sure that the transition was only a short period. Continued growth is still expected late this year and at the start of next year.