It was a long, rough year for the real estate market and next year probably will not be much better. I'm sure with all the spending we have planned for the coming years, it will most likely cause inflation because the excess suply of currency will lower the purchasing power of $1. The Federal Reserve aka "The Fed" has promised to fight inflation at all costs, and the way they fight inflation is by raising interest rates which thereby lowers the overall supply of dollars. Lowering the supply of dollars effectively raises the value of the remaining dollars left in circulation. In the 80's an interest rate on a home loan of 15% was considered phenominal. Rates are now around 5%, an all time low. I would not be surprised to see rates climb to close to 10% in the next 5 years. Many people may not realise the full impact that would have on the real estate market and economy in general. For Sellers, that means the pool of buyers will be significaly lower. For buyers, this will significantly reduce your purchase power, making your loan payment much higher each month. My intention is not to be negative, but realistic and I'm am very positive about growth in the 5-10 year range.
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Daniel Bennison, Laura Byram
Bennison Byram Team Realtors
Neighborhood Experts in Prairie Village and Overland Park
http://www.db.reeceandnichols.com
http://www.lifeinoverlandpark.com
Merry Christmas and a Happy and Prosperous New Year in 2010. Best Regards,
Let's hope interest rates and inflation stay down in 2009.
Happy New Year, have a great 2009!