Market Conditions - May 12, 2006 by Carla L. Davis
While many experts predicted that the "seasonal slowdown" of the winter would quickly disappear in the face of a Spring market, some areas continue to see less and less activity. A reason is very simple. Confidence in the economy is at a low. (CNN reports that 47 percent of those polled feel the economy is "poor.") If consumers -- this includes those in the market to buy a house -- feel that the economy is weak or headed for even more troubled waters, they are unlikely to make any large purchases. Real estate is less about location, location, location -- and more about pricing. If a home is priced "right" it is still selling -- and "right" for consumers that fear an economic downturn is way lower than what prices are now. Does that really mean prices need to come down -- after such seemingly unprecedented rates of appreciation the last few year? Historically, housing prices don't actually drop -- they simply begin to appreciate at more normal values. That is exactly what we see the market doing at this time. Those polled also expressed concerns about rising interest rates, with 39 percent saying they are very worried that borrowing costs will go up. | 
